Correlation Between Bell Copper and Antofagasta PLC
Can any of the company-specific risk be diversified away by investing in both Bell Copper and Antofagasta PLC 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 Bell Copper and Antofagasta PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bell Copper and Antofagasta PLC, you can compare the effects of market volatilities on Bell Copper and Antofagasta PLC 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 Bell Copper with a short position of Antofagasta PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bell Copper and Antofagasta PLC.
Diversification Opportunities for Bell Copper and Antofagasta PLC
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bell and Antofagasta is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Bell Copper and Antofagasta PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antofagasta PLC and Bell Copper 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 Bell Copper are associated (or correlated) with Antofagasta PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antofagasta PLC has no effect on the direction of Bell Copper i.e., Bell Copper and Antofagasta PLC go up and down completely randomly.
Pair Corralation between Bell Copper and Antofagasta PLC
Assuming the 90 days horizon Bell Copper is expected to under-perform the Antofagasta PLC. In addition to that, Bell Copper is 5.34 times more volatile than Antofagasta PLC. It trades about -0.1 of its total potential returns per unit of risk. Antofagasta PLC is currently generating about -0.23 per unit of volatility. If you would invest 2,410 in Antofagasta PLC on August 29, 2024 and sell it today you would lose (327.00) from holding Antofagasta PLC or give up 13.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bell Copper vs. Antofagasta PLC
Performance |
| Timeline |
| Bell Copper |
| Antofagasta PLC |
Bell Copper and Antofagasta PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bell Copper and Antofagasta PLC
The main advantage of trading using opposite Bell Copper and Antofagasta PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bell Copper position performs unexpectedly, Antofagasta PLC 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 Antofagasta PLC will offset losses from the drop in Antofagasta PLC's long position.| Bell Copper vs. Arizona Sonoran Copper | Bell Copper vs. Dor Copper Mining | Bell Copper vs. CopperCorp Resources | Bell Copper vs. Copper Fox Metals |
| Antofagasta PLC vs. Bell Copper | Antofagasta PLC vs. Arizona Sonoran Copper | Antofagasta PLC vs. Dor Copper Mining | Antofagasta PLC vs. CopperCorp 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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