Correlation Between Copper Lake and First Majestic
Can any of the company-specific risk be diversified away by investing in both Copper Lake and First Majestic 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 Lake and First Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Copper Lake Resources and First Majestic Silver, you can compare the effects of market volatilities on Copper Lake and First Majestic 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 Lake with a short position of First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copper Lake and First Majestic.
Diversification Opportunities for Copper Lake and First Majestic
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Copper and First is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Copper Lake Resources and First Majestic Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Majestic Silver and Copper Lake 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 Lake Resources are associated (or correlated) with First Majestic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Majestic Silver has no effect on the direction of Copper Lake i.e., Copper Lake and First Majestic go up and down completely randomly.
Pair Corralation between Copper Lake and First Majestic
Assuming the 90 days horizon Copper Lake Resources is expected to generate 5.21 times more return on investment than First Majestic. However, Copper Lake is 5.21 times more volatile than First Majestic Silver. It trades about 0.06 of its potential returns per unit of risk. First Majestic Silver is currently generating about 0.0 per unit of risk. If you would invest 7.00 in Copper Lake Resources on September 12, 2024 and sell it today you would lose (6.00) from holding Copper Lake Resources or give up 85.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copper Lake Resources vs. First Majestic Silver
Performance |
| Timeline |
| Copper Lake Resources |
| First Majestic Silver |
Copper Lake and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copper Lake and First Majestic
The main advantage of trading using opposite Copper Lake and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copper Lake position performs unexpectedly, First Majestic 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 First Majestic will offset losses from the drop in First Majestic's long position.| Copper Lake vs. Black Widow Resources | Copper Lake vs. Eros Resources Corp | Copper Lake vs. Magnum Goldcorp |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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