Correlation Between CopperCorp Resources and Southern Copper
Can any of the company-specific risk be diversified away by investing in both CopperCorp Resources and Southern 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 CopperCorp Resources and Southern Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CopperCorp Resources and Southern Copper, you can compare the effects of market volatilities on CopperCorp Resources and Southern 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 CopperCorp Resources with a short position of Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of CopperCorp Resources and Southern Copper.
Diversification Opportunities for CopperCorp Resources and Southern Copper
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CopperCorp and Southern is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding CopperCorp Resources and Southern Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper 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 Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper has no effect on the direction of CopperCorp Resources i.e., CopperCorp Resources and Southern Copper go up and down completely randomly.
Pair Corralation between CopperCorp Resources and Southern Copper
Assuming the 90 days horizon CopperCorp Resources is expected to generate 6.58 times more return on investment than Southern Copper. However, CopperCorp Resources is 6.58 times more volatile than Southern Copper. It trades about 0.26 of its potential returns per unit of risk. Southern Copper is currently generating about -0.27 per unit of risk. If you would invest 6.93 in CopperCorp Resources on August 29, 2024 and sell it today you would earn a total of 6.07 from holding CopperCorp Resources or generate 87.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CopperCorp Resources vs. Southern Copper
Performance |
| Timeline |
| CopperCorp Resources |
| Southern Copper |
CopperCorp Resources and Southern Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CopperCorp Resources and Southern Copper
The main advantage of trading using opposite CopperCorp Resources and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CopperCorp Resources position performs unexpectedly, Southern 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 Southern Copper will offset losses from the drop in Southern Copper's long position.| CopperCorp Resources vs. Bell Copper | CopperCorp Resources vs. Copper Fox Metals | CopperCorp Resources vs. First Quantum Minerals | CopperCorp Resources vs. Southern Copper |
| Southern Copper vs. Ero Copper Corp | Southern Copper vs. Hudbay Minerals | Southern Copper vs. Taseko Mines | Southern Copper vs. Amerigo Resources |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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