Correlation Between Ero Copper and Copperbank Resources
Can any of the company-specific risk be diversified away by investing in both Ero Copper and Copperbank 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 Ero Copper and Copperbank Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ero Copper Corp and Copperbank Resources Corp, you can compare the effects of market volatilities on Ero Copper and Copperbank 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 Ero Copper with a short position of Copperbank Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ero Copper and Copperbank Resources.
Diversification Opportunities for Ero Copper and Copperbank Resources
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ero and Copperbank is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Ero Copper Corp and Copperbank Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copperbank Resources Corp and Ero 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 Ero Copper Corp are associated (or correlated) with Copperbank Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copperbank Resources Corp has no effect on the direction of Ero Copper i.e., Ero Copper and Copperbank Resources go up and down completely randomly.
Pair Corralation between Ero Copper and Copperbank Resources
Considering the 90-day investment horizon Ero Copper is expected to generate 1.85 times less return on investment than Copperbank Resources. But when comparing it to its historical volatility, Ero Copper Corp is 1.31 times less risky than Copperbank Resources. It trades about 0.03 of its potential returns per unit of risk. Copperbank Resources Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 42.00 in Copperbank Resources Corp on August 25, 2024 and sell it today you would earn a total of 22.00 from holding Copperbank Resources Corp or generate 52.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ero Copper Corp vs. Copperbank Resources Corp
Performance |
| Timeline |
| Ero Copper Corp |
| Copperbank Resources Corp |
Ero Copper and Copperbank Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ero Copper and Copperbank Resources
The main advantage of trading using opposite Ero Copper and Copperbank Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ero Copper position performs unexpectedly, Copperbank 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 Copperbank Resources will offset losses from the drop in Copperbank Resources' long position.| Ero Copper vs. Freeport McMoran Copper Gold | Ero Copper vs. Amerigo Resources | Ero Copper vs. Hudbay Minerals | Ero Copper vs. Capstone Copper Corp |
| Copperbank Resources vs. Bell Copper | Copperbank Resources vs. CopperCorp Resources | Copperbank Resources vs. Copper Fox Metals | Copperbank Resources vs. First Quantum Minerals |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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