Correlation Between Copperbank Resources and Hudbay Minerals
Can any of the company-specific risk be diversified away by investing in both Copperbank Resources and Hudbay Minerals 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 Hudbay Minerals 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 Hudbay Minerals, you can compare the effects of market volatilities on Copperbank Resources and Hudbay Minerals 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 Hudbay Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copperbank Resources and Hudbay Minerals.
Diversification Opportunities for Copperbank Resources and Hudbay Minerals
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Copperbank and Hudbay is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Copperbank Resources Corp and Hudbay Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudbay Minerals 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 Hudbay Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudbay Minerals has no effect on the direction of Copperbank Resources i.e., Copperbank Resources and Hudbay Minerals go up and down completely randomly.
Pair Corralation between Copperbank Resources and Hudbay Minerals
Assuming the 90 days horizon Copperbank Resources Corp is expected to generate 1.33 times more return on investment than Hudbay Minerals. However, Copperbank Resources is 1.33 times more volatile than Hudbay Minerals. It trades about 0.04 of its potential returns per unit of risk. Hudbay Minerals is currently generating about 0.05 per unit of risk. If you would invest 42.00 in Copperbank Resources Corp on August 25, 2024 and sell it today you would earn a total of 22.00 from holding Copperbank Resources Corp or generate 52.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Copperbank Resources Corp vs. Hudbay Minerals
Performance |
| Timeline |
| Copperbank Resources Corp |
| Hudbay Minerals |
Copperbank Resources and Hudbay Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copperbank Resources and Hudbay Minerals
The main advantage of trading using opposite Copperbank Resources and Hudbay Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copperbank Resources position performs unexpectedly, Hudbay Minerals 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 Hudbay Minerals will offset losses from the drop in Hudbay Minerals' long position.| Copperbank Resources vs. Bell Copper | Copperbank Resources vs. CopperCorp Resources | Copperbank Resources vs. Copper Fox Metals | Copperbank Resources vs. First Quantum Minerals |
| Hudbay Minerals vs. Teck Resources Ltd | Hudbay Minerals vs. Fortuna Silver Mines | Hudbay Minerals vs. Osisko Gold Ro | Hudbay Minerals vs. Nexa Resources SA |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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