Correlation Between Cooper Metals and Air New
Can any of the company-specific risk be diversified away by investing in both Cooper Metals and Air New 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 Air New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cooper Metals and Air New Zealand, you can compare the effects of market volatilities on Cooper Metals and Air New 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 Air New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cooper Metals and Air New.
Diversification Opportunities for Cooper Metals and Air New
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cooper and Air is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Cooper Metals and Air New Zealand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air New Zealand 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 Air New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air New Zealand has no effect on the direction of Cooper Metals i.e., Cooper Metals and Air New go up and down completely randomly.
Pair Corralation between Cooper Metals and Air New
Assuming the 90 days trading horizon Cooper Metals is expected to under-perform the Air New. In addition to that, Cooper Metals is 5.79 times more volatile than Air New Zealand. It trades about -0.01 of its total potential returns per unit of risk. Air New Zealand is currently generating about -0.03 per unit of volatility. If you would invest 64.00 in Air New Zealand on September 3, 2024 and sell it today you would lose (13.00) from holding Air New Zealand or give up 20.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cooper Metals vs. Air New Zealand
Performance |
| Timeline |
| Cooper Metals |
| Air New Zealand |
Cooper Metals and Air New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cooper Metals and Air New
The main advantage of trading using opposite Cooper Metals and Air New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cooper Metals position performs unexpectedly, Air New 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 Air New will offset losses from the drop in Air New's long position.| Cooper Metals vs. Richmond Vanadium Technology | Cooper Metals vs. Metro Mining | Cooper Metals vs. Ras Technology Holdings | Cooper Metals vs. Dug Technology |
| Air New vs. Jupiter Energy | Air New vs. WA1 Resources | Air New vs. Predictive Discovery | Air New vs. Cooper Metals |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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