Correlation Between Base Resources and Interra Copper
Can any of the company-specific risk be diversified away by investing in both Base Resources and Interra 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 Base Resources and Interra Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Base Resources Limited and Interra Copper Corp, you can compare the effects of market volatilities on Base Resources and Interra 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 Base Resources with a short position of Interra Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Base Resources and Interra Copper.
Diversification Opportunities for Base Resources and Interra Copper
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Base and Interra is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Base Resources Limited and Interra Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interra Copper Corp and Base Resources 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 Base Resources Limited are associated (or correlated) with Interra Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interra Copper Corp has no effect on the direction of Base Resources i.e., Base Resources and Interra Copper go up and down completely randomly.
Pair Corralation between Base Resources and Interra Copper
If you would invest 8.50 in Interra Copper Corp on September 2, 2024 and sell it today you would lose (1.92) from holding Interra Copper Corp or give up 22.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Base Resources Limited vs. Interra Copper Corp
Performance |
| Timeline |
| Base Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Interra Copper Corp |
Base Resources and Interra Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Base Resources and Interra Copper
The main advantage of trading using opposite Base Resources and Interra Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Base Resources position performs unexpectedly, Interra 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 Interra Copper will offset losses from the drop in Interra Copper's long position.| Base Resources vs. Macmahon Holdings Limited | Base Resources vs. Rokmaster Resources Corp | Base Resources vs. Hudson Resources | Base Resources vs. Thunder Gold Corp |
| Interra Copper vs. Sherritt International | Interra Copper vs. Metals X Limited | Interra Copper vs. Anglo American PLC | Interra Copper vs. ZincX Resources Corp |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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