Correlation Between Copper 360 and Kap Industrial
Can any of the company-specific risk be diversified away by investing in both Copper 360 and Kap Industrial 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 360 and Kap Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Copper 360 and Kap Industrial Holdings, you can compare the effects of market volatilities on Copper 360 and Kap Industrial 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 360 with a short position of Kap Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copper 360 and Kap Industrial.
Diversification Opportunities for Copper 360 and Kap Industrial
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Copper and Kap is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Copper 360 and Kap Industrial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kap Industrial Holdings and Copper 360 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 360 are associated (or correlated) with Kap Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kap Industrial Holdings has no effect on the direction of Copper 360 i.e., Copper 360 and Kap Industrial go up and down completely randomly.
Pair Corralation between Copper 360 and Kap Industrial
Assuming the 90 days trading horizon Copper 360 is expected to generate 1.09 times more return on investment than Kap Industrial. However, Copper 360 is 1.09 times more volatile than Kap Industrial Holdings. It trades about -0.04 of its potential returns per unit of risk. Kap Industrial Holdings is currently generating about -0.14 per unit of risk. If you would invest 22,500 in Copper 360 on November 3, 2024 and sell it today you would lose (700.00) from holding Copper 360 or give up 3.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copper 360 vs. Kap Industrial Holdings
Performance |
| Timeline |
| Copper 360 |
| Kap Industrial Holdings |
Copper 360 and Kap Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copper 360 and Kap Industrial
The main advantage of trading using opposite Copper 360 and Kap Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copper 360 position performs unexpectedly, Kap Industrial 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 Kap Industrial will offset losses from the drop in Kap Industrial's long position.| Copper 360 vs. Prosus NV | Copper 360 vs. Compagnie Financire Richemont | Copper 360 vs. British American Tobacco | Copper 360 vs. Glencore PLC |
| Kap Industrial vs. Mantengu Mining | Kap Industrial vs. CA Sales Holdings | Kap Industrial vs. RCL Foods | Kap Industrial vs. Standard Bank Group |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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