Correlation Between Copper For and B Investments
Can any of the company-specific risk be diversified away by investing in both Copper For and B Investments 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 Copper For and B Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Copper For Commercial and B Investments Holding, you can compare the effects of market volatilities on Copper For and B Investments 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 Copper For with a short position of B Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copper For and B Investments.
Diversification Opportunities for Copper For and B Investments
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Copper and BINV is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Copper For Commercial and B Investments Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Investments Holding and Copper For 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 Copper For Commercial are associated (or correlated) with B Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Investments Holding has no effect on the direction of Copper For i.e., Copper For and B Investments go up and down completely randomly.
Pair Corralation between Copper For and B Investments
Assuming the 90 days trading horizon Copper For Commercial is expected to under-perform the B Investments. In addition to that, Copper For is 2.03 times more volatile than B Investments Holding. It trades about -0.23 of its total potential returns per unit of risk. B Investments Holding is currently generating about -0.05 per unit of volatility. If you would invest 2,549 in B Investments Holding on August 31, 2024 and sell it today you would lose (49.00) from holding B Investments Holding or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copper For Commercial vs. B Investments Holding
Performance |
| Timeline |
| Copper For Commercial |
| B Investments Holding |
Copper For and B Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copper For and B Investments
The main advantage of trading using opposite Copper For and B Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copper For position performs unexpectedly, B Investments 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 B Investments will offset losses from the drop in B Investments' long position.| Copper For vs. Delta Insurance | Copper For vs. Mohandes Insurance | Copper For vs. Faisal Islamic Bank | Copper For vs. Al Tawfeek Leasing |
| B Investments vs. Copper For Commercial | B Investments vs. Arab Moltaka Investments | B Investments vs. Saudi Egyptian Investment | B Investments vs. Misr Chemical Industries |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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