Correlation Between Copper Road and Kiplin Metals
Can any of the company-specific risk be diversified away by investing in both Copper Road and Kiplin Metals 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 Road and Kiplin Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Copper Road Resources and Kiplin Metals, you can compare the effects of market volatilities on Copper Road and Kiplin Metals 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 Road with a short position of Kiplin Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copper Road and Kiplin Metals.
Diversification Opportunities for Copper Road and Kiplin Metals
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Copper and Kiplin is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Copper Road Resources and Kiplin Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kiplin Metals and Copper Road 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 Road Resources are associated (or correlated) with Kiplin Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kiplin Metals has no effect on the direction of Copper Road i.e., Copper Road and Kiplin Metals go up and down completely randomly.
Pair Corralation between Copper Road and Kiplin Metals
Assuming the 90 days horizon Copper Road is expected to generate 10.01 times less return on investment than Kiplin Metals. But when comparing it to its historical volatility, Copper Road Resources is 3.97 times less risky than Kiplin Metals. It trades about 0.04 of its potential returns per unit of risk. Kiplin Metals is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 60.00 in Kiplin Metals on September 3, 2024 and sell it today you would lose (34.00) from holding Kiplin Metals or give up 56.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copper Road Resources vs. Kiplin Metals
Performance |
| Timeline |
| Copper Road Resources |
| Kiplin Metals |
Copper Road and Kiplin Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copper Road and Kiplin Metals
The main advantage of trading using opposite Copper Road and Kiplin Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copper Road position performs unexpectedly, Kiplin Metals 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 Kiplin Metals will offset losses from the drop in Kiplin Metals' long position.| Copper Road vs. Algoma Steel Group | Copper Road vs. Champion Iron | Copper Road vs. International Zeolite Corp | Copper Road vs. European Residential Real |
| Kiplin Metals vs. Algoma Steel Group | Kiplin Metals vs. Champion Iron | Kiplin Metals vs. International Zeolite Corp | Kiplin Metals vs. European Residential Real |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |