Correlation Between Copper Mountain and Hudbay Minerals
Can any of the company-specific risk be diversified away by investing in both Copper Mountain 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 Copper Mountain and Hudbay Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Copper Mountain Mining and Hudbay Minerals, you can compare the effects of market volatilities on Copper Mountain 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 Copper Mountain with a short position of Hudbay Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copper Mountain and Hudbay Minerals.
Diversification Opportunities for Copper Mountain and Hudbay Minerals
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Copper and Hudbay is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Copper Mountain Mining and Hudbay Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudbay Minerals and Copper Mountain 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 Copper Mountain Mining 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 Copper Mountain i.e., Copper Mountain and Hudbay Minerals go up and down completely randomly.
Pair Corralation between Copper Mountain and Hudbay Minerals
Assuming the 90 days horizon Copper Mountain Mining is expected to under-perform the Hudbay Minerals. In addition to that, Copper Mountain is 1.88 times more volatile than Hudbay Minerals. It trades about -0.22 of its total potential returns per unit of risk. Hudbay Minerals is currently generating about -0.07 per unit of volatility. If you would invest 958.00 in Hudbay Minerals on August 27, 2024 and sell it today you would lose (54.00) from holding Hudbay Minerals or give up 5.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copper Mountain Mining vs. Hudbay Minerals
Performance |
| Timeline |
| Copper Mountain Mining |
| Hudbay Minerals |
Copper Mountain and Hudbay Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copper Mountain and Hudbay Minerals
The main advantage of trading using opposite Copper Mountain and Hudbay Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copper Mountain 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.| Copper Mountain vs. Ascendant Resources | Copper Mountain vs. Cantex Mine Development | Copper Mountain vs. Amarc Resources | Copper Mountain vs. Sterling Metals Corp |
| Hudbay Minerals vs. Labrador Gold Corp | Hudbay Minerals vs. Aurion Resources | Hudbay Minerals vs. Puma Exploration | Hudbay Minerals vs. Golden Star Resource |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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