Correlation Between Copper Lake and Banyan Gold
Can any of the company-specific risk be diversified away by investing in both Copper Lake and Banyan Gold 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 Banyan Gold 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 Banyan Gold Corp, you can compare the effects of market volatilities on Copper Lake and Banyan Gold 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 Banyan Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copper Lake and Banyan Gold.
Diversification Opportunities for Copper Lake and Banyan Gold
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Copper and Banyan is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Copper Lake Resources and Banyan Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banyan Gold Corp 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 Banyan Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banyan Gold Corp has no effect on the direction of Copper Lake i.e., Copper Lake and Banyan Gold go up and down completely randomly.
Pair Corralation between Copper Lake and Banyan Gold
Assuming the 90 days horizon Copper Lake Resources is expected to generate 9.67 times more return on investment than Banyan Gold. However, Copper Lake is 9.67 times more volatile than Banyan Gold Corp. It trades about 0.06 of its potential returns per unit of risk. Banyan Gold Corp is currently generating about 0.02 per unit of risk. If you would invest 1.00 in Copper Lake Resources on September 1, 2024 and sell it today you would lose (0.50) from holding Copper Lake Resources or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copper Lake Resources vs. Banyan Gold Corp
Performance |
| Timeline |
| Copper Lake Resources |
| Banyan Gold Corp |
Copper Lake and Banyan Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copper Lake and Banyan Gold
The main advantage of trading using opposite Copper Lake and Banyan Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copper Lake position performs unexpectedly, Banyan Gold 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 Banyan Gold will offset losses from the drop in Banyan Gold's long position.| Copper Lake vs. Black Widow Resources | Copper Lake vs. Eros Resources Corp | Copper Lake vs. Magnum Goldcorp |
| Banyan Gold vs. First Majestic Silver | Banyan Gold vs. Ivanhoe Energy | Banyan Gold vs. Orezone Gold Corp | Banyan Gold vs. Faraday Copper Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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