Correlation Between Capstone Copper and Copper Fox
Can any of the company-specific risk be diversified away by investing in both Capstone Copper and Copper Fox 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 Copper Fox 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 Copper Fox Metals, you can compare the effects of market volatilities on Capstone Copper and Copper Fox 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 Copper Fox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstone Copper and Copper Fox.
Diversification Opportunities for Capstone Copper and Copper Fox
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Capstone and Copper is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Copper Corp and Copper Fox Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper Fox Metals 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 Copper Fox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper Fox Metals has no effect on the direction of Capstone Copper i.e., Capstone Copper and Copper Fox go up and down completely randomly.
Pair Corralation between Capstone Copper and Copper Fox
Assuming the 90 days horizon Capstone Copper Corp is expected to under-perform the Copper Fox. But the otc stock apears to be less risky and, when comparing its historical volatility, Capstone Copper Corp is 1.99 times less risky than Copper Fox. The otc stock trades about -0.04 of its potential returns per unit of risk. The Copper Fox Metals is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Copper Fox Metals on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Copper Fox Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capstone Copper Corp vs. Copper Fox Metals
Performance |
| Timeline |
| Capstone Copper Corp |
| Copper Fox Metals |
Capstone Copper and Copper Fox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capstone Copper and Copper Fox
The main advantage of trading using opposite Capstone Copper and Copper Fox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capstone Copper position performs unexpectedly, Copper Fox 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 Copper Fox will offset losses from the drop in Copper Fox's long position.| Capstone Copper vs. Hudbay Minerals | Capstone Copper vs. Ero Copper Corp | Capstone Copper vs. Taseko Mines | Capstone Copper vs. CopperCorp Resources |
| Copper Fox vs. Copper Mountain Mining | Copper Fox vs. Copper Fox Metals | Copper Fox vs. Highland Copper | Copper Fox vs. Copperbank Resources Corp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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