Correlation Between Bell Copper and World Copper
Can any of the company-specific risk be diversified away by investing in both Bell Copper and World 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 Bell Copper and World Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bell Copper and World Copper, you can compare the effects of market volatilities on Bell Copper and World 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 Bell Copper with a short position of World Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bell Copper and World Copper.
Diversification Opportunities for Bell Copper and World Copper
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bell and World is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Bell Copper and World Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Copper 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 World Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Copper has no effect on the direction of Bell Copper i.e., Bell Copper and World Copper go up and down completely randomly.
Pair Corralation between Bell Copper and World Copper
Assuming the 90 days horizon Bell Copper is expected to generate 3.28 times more return on investment than World Copper. However, Bell Copper is 3.28 times more volatile than World Copper. It trades about 0.05 of its potential returns per unit of risk. World Copper is currently generating about -0.1 per unit of risk. If you would invest 2.70 in Bell Copper on September 5, 2024 and sell it today you would lose (0.20) from holding Bell Copper or give up 7.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bell Copper vs. World Copper
Performance |
| Timeline |
| Bell Copper |
| World Copper |
Bell Copper and World Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bell Copper and World Copper
The main advantage of trading using opposite Bell Copper and World Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bell Copper position performs unexpectedly, World 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 World Copper will offset losses from the drop in World Copper's long position.| Bell Copper vs. Advantage Solutions | Bell Copper vs. Atlas Corp | Bell Copper vs. PureCycle Technologies | Bell Copper vs. WM Technology |
| World Copper vs. Copper Fox Metals | World Copper vs. Imperial Metals | World Copper vs. Bell Copper | World Copper vs. Dor Copper Mining |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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