Correlation Between Copper Mountain and KGHM Polska
Can any of the company-specific risk be diversified away by investing in both Copper Mountain and KGHM Polska 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 KGHM Polska 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 KGHM Polska Miedz, you can compare the effects of market volatilities on Copper Mountain and KGHM Polska 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 KGHM Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copper Mountain and KGHM Polska.
Diversification Opportunities for Copper Mountain and KGHM Polska
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Copper and KGHM is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Copper Mountain Mining and KGHM Polska Miedz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KGHM Polska Miedz 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 KGHM Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KGHM Polska Miedz has no effect on the direction of Copper Mountain i.e., Copper Mountain and KGHM Polska go up and down completely randomly.
Pair Corralation between Copper Mountain and KGHM Polska
Assuming the 90 days horizon Copper Mountain Mining is expected to generate 30.11 times more return on investment than KGHM Polska. However, Copper Mountain is 30.11 times more volatile than KGHM Polska Miedz. It trades about 0.18 of its potential returns per unit of risk. KGHM Polska Miedz is currently generating about 0.23 per unit of risk. If you would invest 0.00 in Copper Mountain Mining on September 1, 2024 and sell it today you would earn a total of 20.00 from holding Copper Mountain Mining or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 13.73% |
| Values | Daily Returns |
Copper Mountain Mining vs. KGHM Polska Miedz
Performance |
| Timeline |
| Copper Mountain Mining |
| KGHM Polska Miedz |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Copper Mountain and KGHM Polska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copper Mountain and KGHM Polska
The main advantage of trading using opposite Copper Mountain and KGHM Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copper Mountain position performs unexpectedly, KGHM Polska 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 KGHM Polska will offset losses from the drop in KGHM Polska's long position.| Copper Mountain vs. Ero Copper Corp | Copper Mountain vs. Copper Fox Metals | Copper Mountain vs. First Quantum Minerals | Copper Mountain vs. Hudbay Minerals |
| KGHM Polska vs. Bell Copper | KGHM Polska vs. Arizona Sonoran Copper | KGHM Polska vs. CopperCorp Resources | KGHM Polska vs. Dor Copper Mining |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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