Correlation Between Cooper Metals and TasFoods
Can any of the company-specific risk be diversified away by investing in both Cooper Metals and TasFoods 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 TasFoods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cooper Metals and TasFoods, you can compare the effects of market volatilities on Cooper Metals and TasFoods 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 TasFoods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cooper Metals and TasFoods.
Diversification Opportunities for Cooper Metals and TasFoods
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cooper and TasFoods is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Cooper Metals and TasFoods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TasFoods 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 TasFoods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TasFoods has no effect on the direction of Cooper Metals i.e., Cooper Metals and TasFoods go up and down completely randomly.
Pair Corralation between Cooper Metals and TasFoods
Assuming the 90 days trading horizon Cooper Metals is expected to under-perform the TasFoods. But the stock apears to be less risky and, when comparing its historical volatility, Cooper Metals is 1.03 times less risky than TasFoods. The stock trades about -0.08 of its potential returns per unit of risk. The TasFoods is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2.60 in TasFoods on September 4, 2024 and sell it today you would lose (1.50) from holding TasFoods or give up 57.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cooper Metals vs. TasFoods
Performance |
| Timeline |
| Cooper Metals |
| TasFoods |
Cooper Metals and TasFoods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cooper Metals and TasFoods
The main advantage of trading using opposite Cooper Metals and TasFoods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cooper Metals position performs unexpectedly, TasFoods 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 TasFoods will offset losses from the drop in TasFoods' long position.| Cooper Metals vs. Event Hospitality and | Cooper Metals vs. COAST ENTERTAINMENT HOLDINGS | Cooper Metals vs. ARN Media Limited | Cooper Metals vs. Ramsay Health Care |
| TasFoods vs. Ecofibre | TasFoods vs. Adriatic Metals Plc | TasFoods vs. Australian Dairy Farms | TasFoods vs. Australian Agricultural |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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