Correlation Between Clifton Mining and American Copper
Can any of the company-specific risk be diversified away by investing in both Clifton Mining and American 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 Clifton Mining and American Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clifton Mining Co and American Copper Development, you can compare the effects of market volatilities on Clifton Mining and American 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 Clifton Mining with a short position of American Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clifton Mining and American Copper.
Diversification Opportunities for Clifton Mining and American Copper
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Clifton and American is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Clifton Mining Co and American Copper Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Copper Deve and Clifton Mining 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 Clifton Mining Co are associated (or correlated) with American Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Copper Deve has no effect on the direction of Clifton Mining i.e., Clifton Mining and American Copper go up and down completely randomly.
Pair Corralation between Clifton Mining and American Copper
Given the investment horizon of 90 days Clifton Mining is expected to generate 4.06 times less return on investment than American Copper. But when comparing it to its historical volatility, Clifton Mining Co is 2.0 times less risky than American Copper. It trades about 0.03 of its potential returns per unit of risk. American Copper Development is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4.20 in American Copper Development on November 3, 2024 and sell it today you would lose (1.80) from holding American Copper Development or give up 42.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.64% |
| Values | Daily Returns |
Clifton Mining Co vs. American Copper Development
Performance |
| Timeline |
| Clifton Mining |
| American Copper Deve |
Clifton Mining and American Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clifton Mining and American Copper
The main advantage of trading using opposite Clifton Mining and American Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clifton Mining position performs unexpectedly, American 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 American Copper will offset losses from the drop in American Copper's long position.| Clifton Mining vs. Cartier Iron Corp | Clifton Mining vs. Arctic Star Exploration | Clifton Mining vs. Capella Minerals Limited | Clifton Mining vs. Denarius Silver Corp |
| American Copper vs. Marine Products | American Copper vs. ANTA Sports Products | American Copper vs. SunOpta | American Copper vs. Cardinal Health |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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