Correlation Between Dime Community and Copper
Can any of the company-specific risk be diversified away by investing in both Dime Community and 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 Dime Community and Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dime Community Bancshares and Copper, you can compare the effects of market volatilities on Dime Community and 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 Dime Community with a short position of Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dime Community and Copper.
Diversification Opportunities for Dime Community and Copper
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dime and Copper is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Dime Community Bancshares and Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper and Dime Community 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 Dime Community Bancshares are associated (or correlated) with Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper has no effect on the direction of Dime Community i.e., Dime Community and Copper go up and down completely randomly.
Pair Corralation between Dime Community and Copper
Assuming the 90 days horizon Dime Community Bancshares is expected to generate 1.4 times more return on investment than Copper. However, Dime Community is 1.4 times more volatile than Copper. It trades about 0.03 of its potential returns per unit of risk. Copper is currently generating about 0.02 per unit of risk. If you would invest 1,626 in Dime Community Bancshares on August 29, 2024 and sell it today you would earn a total of 354.00 from holding Dime Community Bancshares or generate 21.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.45% |
| Values | Daily Returns |
Dime Community Bancshares vs. Copper
Performance |
| Timeline |
| Dime Community Bancshares |
| Copper |
Dime Community and Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dime Community and Copper
The main advantage of trading using opposite Dime Community and Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dime Community position performs unexpectedly, 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 Copper will offset losses from the drop in Copper's long position.| Dime Community vs. Capital One Financial | Dime Community vs. Capital One Financial | Dime Community vs. Bank of America | Dime Community vs. KeyCorp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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