Correlation Between Aguila American and Southern Copper
Can any of the company-specific risk be diversified away by investing in both Aguila American and Southern Copper at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Aguila American and Southern Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aguila American Gold and Southern Copper, you can compare the effects of market volatilities on Aguila American and Southern Copper and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Aguila American with a short position of Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aguila American and Southern Copper.
Diversification Opportunities for Aguila American and Southern Copper
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aguila and Southern is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Aguila American Gold and Southern Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper and Aguila American is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Aguila American Gold are associated (or correlated) with Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper has no effect on the direction of Aguila American i.e., Aguila American and Southern Copper go up and down completely randomly.
Pair Corralation between Aguila American and Southern Copper
Assuming the 90 days horizon Aguila American Gold is expected to generate 3.58 times more return on investment than Southern Copper. However, Aguila American is 3.58 times more volatile than Southern Copper. It trades about 0.08 of its potential returns per unit of risk. Southern Copper is currently generating about 0.07 per unit of risk. If you would invest 11.00 in Aguila American Gold on August 25, 2024 and sell it today you would earn a total of 17.00 from holding Aguila American Gold or generate 154.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.88% |
| Values | Daily Returns |
Aguila American Gold vs. Southern Copper
Performance |
| Timeline |
| Aguila American Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Southern Copper |
Aguila American and Southern Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aguila American and Southern Copper
The main advantage of trading using opposite Aguila American and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aguila American position performs unexpectedly, Southern Copper can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Southern Copper will offset losses from the drop in Southern Copper's long position.| Aguila American vs. Bell Copper | Aguila American vs. CopperCorp Resources | Aguila American vs. Copper Fox Metals | Aguila American vs. First Quantum Minerals |
| Southern Copper vs. Ero Copper Corp | Southern Copper vs. Hudbay Minerals | Southern Copper vs. Taseko Mines | Southern Copper vs. Amerigo Resources |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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