Correlation Between Copperbank Resources and Amerigo Resources
Can any of the company-specific risk be diversified away by investing in both Copperbank Resources and Amerigo Resources 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 Copperbank Resources and Amerigo Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Copperbank Resources Corp and Amerigo Resources, you can compare the effects of market volatilities on Copperbank Resources and Amerigo Resources 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 Copperbank Resources with a short position of Amerigo Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copperbank Resources and Amerigo Resources.
Diversification Opportunities for Copperbank Resources and Amerigo Resources
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Copperbank and Amerigo is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Copperbank Resources Corp and Amerigo Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amerigo Resources and Copperbank Resources 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 Copperbank Resources Corp are associated (or correlated) with Amerigo Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amerigo Resources has no effect on the direction of Copperbank Resources i.e., Copperbank Resources and Amerigo Resources go up and down completely randomly.
Pair Corralation between Copperbank Resources and Amerigo Resources
Assuming the 90 days horizon Copperbank Resources Corp is expected to generate 1.27 times more return on investment than Amerigo Resources. However, Copperbank Resources is 1.27 times more volatile than Amerigo Resources. It trades about -0.01 of its potential returns per unit of risk. Amerigo Resources is currently generating about -0.1 per unit of risk. If you would invest 63.00 in Copperbank Resources Corp on August 29, 2024 and sell it today you would lose (1.00) from holding Copperbank Resources Corp or give up 1.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copperbank Resources Corp vs. Amerigo Resources
Performance |
| Timeline |
| Copperbank Resources Corp |
| Amerigo Resources |
Copperbank Resources and Amerigo Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copperbank Resources and Amerigo Resources
The main advantage of trading using opposite Copperbank Resources and Amerigo Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copperbank Resources position performs unexpectedly, Amerigo Resources 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 Amerigo Resources will offset losses from the drop in Amerigo Resources' long position.| Copperbank Resources vs. Bell Copper | Copperbank Resources vs. Copper Fox Metals | Copperbank Resources vs. First Quantum Minerals | Copperbank Resources vs. Southern Copper |
| Amerigo Resources vs. Ascendant Resources | Amerigo Resources vs. Cantex Mine Development | Amerigo Resources vs. Amarc Resources | Amerigo Resources vs. Sterling Metals Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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