Correlation Between Copper Mountain and Nevada Copper
Can any of the company-specific risk be diversified away by investing in both Copper Mountain and Nevada 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 Copper Mountain and Nevada Copper 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 Nevada Copper Corp, you can compare the effects of market volatilities on Copper Mountain and Nevada 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 Copper Mountain with a short position of Nevada Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copper Mountain and Nevada Copper.
Diversification Opportunities for Copper Mountain and Nevada Copper
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Copper and Nevada is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Copper Mountain Mining and Nevada Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nevada Copper Corp 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 Nevada Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nevada Copper Corp has no effect on the direction of Copper Mountain i.e., Copper Mountain and Nevada Copper go up and down completely randomly.
Pair Corralation between Copper Mountain and Nevada Copper
Assuming the 90 days horizon Copper Mountain Mining is expected to generate 2.13 times more return on investment than Nevada Copper. However, Copper Mountain is 2.13 times more volatile than Nevada Copper Corp. It trades about 0.12 of its potential returns per unit of risk. Nevada Copper Corp is currently generating about -0.02 per unit of risk. If you would invest 5.00 in Copper Mountain Mining on August 25, 2024 and sell it today you would earn a total of 18.00 from holding Copper Mountain Mining or generate 360.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.05% |
| Values | Daily Returns |
Copper Mountain Mining vs. Nevada Copper Corp
Performance |
| Timeline |
| Copper Mountain Mining |
| Nevada Copper Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Copper Mountain and Nevada Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copper Mountain and Nevada Copper
The main advantage of trading using opposite Copper Mountain and Nevada Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copper Mountain position performs unexpectedly, Nevada 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 Nevada Copper will offset losses from the drop in Nevada Copper'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 |
| Nevada Copper vs. Ero Copper Corp | Nevada Copper vs. Copperbank Resources Corp | Nevada Copper vs. Copper Mountain Mining | Nevada Copper vs. CopperCorp Resources |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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