Correlation Between Copperbank Resources and Ero Copper
Can any of the company-specific risk be diversified away by investing in both Copperbank Resources and Ero Copper 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 Ero Copper 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 Ero Copper Corp, you can compare the effects of market volatilities on Copperbank Resources and Ero Copper 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 Ero Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copperbank Resources and Ero Copper.
Diversification Opportunities for Copperbank Resources and Ero Copper
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Copperbank and Ero is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Copperbank Resources Corp and Ero Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ero Copper Corp 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 Ero Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ero Copper Corp has no effect on the direction of Copperbank Resources i.e., Copperbank Resources and Ero Copper go up and down completely randomly.
Pair Corralation between Copperbank Resources and Ero Copper
Assuming the 90 days horizon Copperbank Resources Corp is expected to generate 0.83 times more return on investment than Ero Copper. However, Copperbank Resources Corp is 1.21 times less risky than Ero Copper. It trades about -0.01 of its potential returns per unit of risk. Ero Copper Corp is currently generating about -0.33 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copperbank Resources Corp vs. Ero Copper Corp
Performance |
| Timeline |
| Copperbank Resources Corp |
| Ero Copper Corp |
Copperbank Resources and Ero Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copperbank Resources and Ero Copper
The main advantage of trading using opposite Copperbank Resources and Ero Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copperbank Resources position performs unexpectedly, Ero Copper 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 Ero Copper will offset losses from the drop in Ero Copper's long position.| Copperbank Resources vs. Bell Copper | Copperbank Resources vs. Copper Fox Metals | Copperbank Resources vs. First Quantum Minerals | Copperbank Resources vs. Southern Copper |
| Ero Copper vs. Freeport McMoran Copper Gold | Ero Copper vs. Amerigo Resources | Ero Copper vs. Hudbay Minerals | Ero Copper vs. Capstone Copper 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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