Correlation Between Dor Copper and First Quantum
Can any of the company-specific risk be diversified away by investing in both Dor Copper and First Quantum 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 Dor Copper and First Quantum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dor Copper Mining and First Quantum Minerals, you can compare the effects of market volatilities on Dor Copper and First Quantum 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 Dor Copper with a short position of First Quantum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dor Copper and First Quantum.
Diversification Opportunities for Dor Copper and First Quantum
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dor and First is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Dor Copper Mining and First Quantum Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Quantum Minerals and Dor 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 Dor Copper Mining are associated (or correlated) with First Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Quantum Minerals has no effect on the direction of Dor Copper i.e., Dor Copper and First Quantum go up and down completely randomly.
Pair Corralation between Dor Copper and First Quantum
Assuming the 90 days horizon Dor Copper Mining is expected to generate 1.77 times more return on investment than First Quantum. However, Dor Copper is 1.77 times more volatile than First Quantum Minerals. It trades about 0.02 of its potential returns per unit of risk. First Quantum Minerals is currently generating about 0.02 per unit of risk. If you would invest 12.00 in Dor Copper Mining on August 25, 2024 and sell it today you would lose (2.20) from holding Dor Copper Mining or give up 18.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Dor Copper Mining vs. First Quantum Minerals
Performance |
| Timeline |
| Dor Copper Mining |
| First Quantum Minerals |
Dor Copper and First Quantum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dor Copper and First Quantum
The main advantage of trading using opposite Dor Copper and First Quantum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dor Copper position performs unexpectedly, First Quantum 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 First Quantum will offset losses from the drop in First Quantum's long position.| Dor Copper vs. Imperial Metals | Dor Copper vs. Bell Copper | Dor Copper vs. Copper Fox Metals | Dor Copper vs. Arizona Sonoran Copper |
| First Quantum vs. Amerigo Resources | First Quantum vs. Antofagasta PLC | First Quantum vs. Capstone Copper Corp | First Quantum vs. Copper Mountain Mining |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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