Correlation Between CopperCorp Resources and Copperbank Resources
Can any of the company-specific risk be diversified away by investing in both CopperCorp Resources and Copperbank Resources 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 CopperCorp Resources and Copperbank Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CopperCorp Resources and Copperbank Resources Corp, you can compare the effects of market volatilities on CopperCorp Resources and Copperbank Resources 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 CopperCorp Resources with a short position of Copperbank Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of CopperCorp Resources and Copperbank Resources.
Diversification Opportunities for CopperCorp Resources and Copperbank Resources
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CopperCorp and Copperbank is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding CopperCorp Resources and Copperbank Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copperbank Resources Corp and CopperCorp 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 CopperCorp Resources are associated (or correlated) with Copperbank Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copperbank Resources Corp has no effect on the direction of CopperCorp Resources i.e., CopperCorp Resources and Copperbank Resources go up and down completely randomly.
Pair Corralation between CopperCorp Resources and Copperbank Resources
Assuming the 90 days horizon CopperCorp Resources is expected to generate 4.31 times more return on investment than Copperbank Resources. However, CopperCorp Resources is 4.31 times more volatile than Copperbank Resources Corp. It trades about 0.06 of its potential returns per unit of risk. Copperbank Resources Corp is currently generating about 0.04 per unit of risk. If you would invest 9.75 in CopperCorp Resources on August 25, 2024 and sell it today you would earn a total of 1.25 from holding CopperCorp Resources or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CopperCorp Resources vs. Copperbank Resources Corp
Performance |
| Timeline |
| CopperCorp Resources |
| Copperbank Resources Corp |
CopperCorp Resources and Copperbank Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CopperCorp Resources and Copperbank Resources
The main advantage of trading using opposite CopperCorp Resources and Copperbank Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CopperCorp Resources position performs unexpectedly, Copperbank Resources 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 Copperbank Resources will offset losses from the drop in Copperbank Resources' long position.| CopperCorp Resources vs. Bell Copper | CopperCorp Resources vs. Copper Fox Metals | CopperCorp Resources vs. First Quantum Minerals | CopperCorp Resources vs. Southern Copper |
| Copperbank Resources vs. Bell Copper | Copperbank Resources vs. CopperCorp Resources | Copperbank Resources vs. Copper Fox Metals | Copperbank Resources vs. First Quantum 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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