Correlation Between Cooper Metals and Magellan Financial
Can any of the company-specific risk be diversified away by investing in both Cooper Metals and Magellan Financial 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 Magellan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cooper Metals and Magellan Financial Group, you can compare the effects of market volatilities on Cooper Metals and Magellan Financial 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 Magellan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cooper Metals and Magellan Financial.
Diversification Opportunities for Cooper Metals and Magellan Financial
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cooper and Magellan is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Cooper Metals and Magellan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magellan Financial 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 Magellan Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magellan Financial has no effect on the direction of Cooper Metals i.e., Cooper Metals and Magellan Financial go up and down completely randomly.
Pair Corralation between Cooper Metals and Magellan Financial
Assuming the 90 days trading horizon Cooper Metals is expected to under-perform the Magellan Financial. In addition to that, Cooper Metals is 3.1 times more volatile than Magellan Financial Group. It trades about -0.01 of its total potential returns per unit of risk. Magellan Financial Group is currently generating about 0.04 per unit of volatility. If you would invest 799.00 in Magellan Financial Group on September 3, 2024 and sell it today you would earn a total of 294.00 from holding Magellan Financial Group or generate 36.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cooper Metals vs. Magellan Financial Group
Performance |
| Timeline |
| Cooper Metals |
| Magellan Financial |
Cooper Metals and Magellan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cooper Metals and Magellan Financial
The main advantage of trading using opposite Cooper Metals and Magellan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cooper Metals position performs unexpectedly, Magellan Financial 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 Magellan Financial will offset losses from the drop in Magellan Financial'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 |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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