Correlation Between Cooper Metals and Sports Entertainment
Can any of the company-specific risk be diversified away by investing in both Cooper Metals and Sports Entertainment 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 Sports Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cooper Metals and Sports Entertainment Group, you can compare the effects of market volatilities on Cooper Metals and Sports Entertainment 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 Sports Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cooper Metals and Sports Entertainment.
Diversification Opportunities for Cooper Metals and Sports Entertainment
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cooper and Sports is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Cooper Metals and Sports Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sports Entertainment 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 Sports Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sports Entertainment has no effect on the direction of Cooper Metals i.e., Cooper Metals and Sports Entertainment go up and down completely randomly.
Pair Corralation between Cooper Metals and Sports Entertainment
Assuming the 90 days trading horizon Cooper Metals is expected to generate 1.19 times more return on investment than Sports Entertainment. However, Cooper Metals is 1.19 times more volatile than Sports Entertainment Group. It trades about 0.07 of its potential returns per unit of risk. Sports Entertainment Group is currently generating about -0.03 per unit of risk. If you would invest 4.60 in Cooper Metals on October 18, 2024 and sell it today you would earn a total of 0.20 from holding Cooper Metals or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cooper Metals vs. Sports Entertainment Group
Performance |
| Timeline |
| Cooper Metals |
| Sports Entertainment |
Cooper Metals and Sports Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cooper Metals and Sports Entertainment
The main advantage of trading using opposite Cooper Metals and Sports Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cooper Metals position performs unexpectedly, Sports Entertainment 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 Sports Entertainment will offset losses from the drop in Sports Entertainment's long position.| Cooper Metals vs. Northern Star Resources | Cooper Metals vs. Evolution Mining | Cooper Metals vs. Bluescope Steel | Cooper Metals vs. De Grey Mining |
| Sports Entertainment vs. Nine Entertainment Co | Sports Entertainment vs. Auctus Alternative Investments | Sports Entertainment vs. Garda Diversified Ppty | Sports Entertainment vs. Platinum Asia Investments |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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