Correlation Between Capstone Copper and CopperCorp Resources
Can any of the company-specific risk be diversified away by investing in both Capstone Copper and CopperCorp Resources 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 Capstone Copper and CopperCorp Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capstone Copper Corp and CopperCorp Resources, you can compare the effects of market volatilities on Capstone Copper and CopperCorp Resources 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 Capstone Copper with a short position of CopperCorp Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstone Copper and CopperCorp Resources.
Diversification Opportunities for Capstone Copper and CopperCorp Resources
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capstone and CopperCorp is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Copper Corp and CopperCorp Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CopperCorp Resources and Capstone Copper 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 Capstone Copper Corp are associated (or correlated) with CopperCorp Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CopperCorp Resources has no effect on the direction of Capstone Copper i.e., Capstone Copper and CopperCorp Resources go up and down completely randomly.
Pair Corralation between Capstone Copper and CopperCorp Resources
Assuming the 90 days horizon Capstone Copper is expected to generate 54.15 times less return on investment than CopperCorp Resources. But when comparing it to its historical volatility, Capstone Copper Corp is 3.73 times less risky than CopperCorp Resources. It trades about 0.01 of its potential returns per unit of risk. CopperCorp Resources is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 5.53 in CopperCorp Resources on August 25, 2024 and sell it today you would earn a total of 5.47 from holding CopperCorp Resources or generate 98.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capstone Copper Corp vs. CopperCorp Resources
Performance |
| Timeline |
| Capstone Copper Corp |
| CopperCorp Resources |
Capstone Copper and CopperCorp Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capstone Copper and CopperCorp Resources
The main advantage of trading using opposite Capstone Copper and CopperCorp Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capstone Copper position performs unexpectedly, CopperCorp Resources 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 CopperCorp Resources will offset losses from the drop in CopperCorp Resources' long position.| Capstone Copper vs. Hudbay Minerals | Capstone Copper vs. Ero Copper Corp | Capstone Copper vs. Taseko Mines | Capstone Copper vs. CopperCorp Resources |
| CopperCorp Resources vs. Bell Copper | CopperCorp Resources vs. Copper Fox Metals | CopperCorp Resources vs. First Quantum Minerals | CopperCorp Resources vs. Southern Copper |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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