Correlation Between Bell Copper and Copper Mountain
Can any of the company-specific risk be diversified away by investing in both Bell Copper and Copper Mountain 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 Copper Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bell Copper and Copper Mountain Mining, you can compare the effects of market volatilities on Bell Copper and Copper Mountain 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 Copper Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bell Copper and Copper Mountain.
Diversification Opportunities for Bell Copper and Copper Mountain
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bell and Copper is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bell Copper and Copper Mountain Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper Mountain Mining 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 Copper Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper Mountain Mining has no effect on the direction of Bell Copper i.e., Bell Copper and Copper Mountain go up and down completely randomly.
Pair Corralation between Bell Copper and Copper Mountain
Assuming the 90 days horizon Bell Copper is expected to generate 2.38 times more return on investment than Copper Mountain. However, Bell Copper is 2.38 times more volatile than Copper Mountain Mining. It trades about 0.01 of its potential returns per unit of risk. Copper Mountain Mining is currently generating about -0.18 per unit of risk. If you would invest 2.90 in Bell Copper on November 27, 2024 and sell it today you would lose (0.15) from holding Bell Copper or give up 5.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bell Copper vs. Copper Mountain Mining
Performance |
| Timeline |
| Bell Copper |
| Copper Mountain Mining |
Bell Copper and Copper Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bell Copper and Copper Mountain
The main advantage of trading using opposite Bell Copper and Copper Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bell Copper position performs unexpectedly, Copper Mountain 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 Copper Mountain will offset losses from the drop in Copper Mountain's long position.| Bell Copper vs. Arizona Sonoran Copper | Bell Copper vs. CopperCorp Resources | Bell Copper vs. Copper Fox Metals | Bell Copper vs. Imperial Metals |
| Copper Mountain vs. Ero Copper Corp | Copper Mountain vs. Copper Fox Metals | Copper Mountain vs. First Quantum Minerals | Copper Mountain vs. Hudbay Minerals |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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