Correlation Between Cooper Metals and Adairs
Can any of the company-specific risk be diversified away by investing in both Cooper Metals and Adairs 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 Cooper Metals and Adairs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cooper Metals and Adairs, you can compare the effects of market volatilities on Cooper Metals and Adairs 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 Cooper Metals with a short position of Adairs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cooper Metals and Adairs.
Diversification Opportunities for Cooper Metals and Adairs
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cooper and Adairs is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Cooper Metals and Adairs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adairs and Cooper Metals 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 Cooper Metals are associated (or correlated) with Adairs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adairs has no effect on the direction of Cooper Metals i.e., Cooper Metals and Adairs go up and down completely randomly.
Pair Corralation between Cooper Metals and Adairs
Assuming the 90 days trading horizon Cooper Metals is expected to under-perform the Adairs. In addition to that, Cooper Metals is 1.55 times more volatile than Adairs. It trades about -0.13 of its total potential returns per unit of risk. Adairs is currently generating about 0.0 per unit of volatility. If you would invest 261.00 in Adairs on August 30, 2024 and sell it today you would lose (1.00) from holding Adairs or give up 0.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cooper Metals vs. Adairs
Performance |
| Timeline |
| Cooper Metals |
| Adairs |
Cooper Metals and Adairs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cooper Metals and Adairs
The main advantage of trading using opposite Cooper Metals and Adairs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cooper Metals position performs unexpectedly, Adairs 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 Adairs will offset losses from the drop in Adairs' long position.| Cooper Metals vs. oOhMedia | Cooper Metals vs. Aeris Environmental | Cooper Metals vs. AiMedia Technologies | Cooper Metals vs. Regal Funds Management |
| Adairs vs. Saferoads Holdings | Adairs vs. Aussie Broadband | Adairs vs. Australian Unity Office | Adairs vs. Dexus Convenience Retail |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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