Correlation Between Ero Copper and IM Global
Can any of the company-specific risk be diversified away by investing in both Ero Copper and IM Global 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 IM Global 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 IM Global Partner, you can compare the effects of market volatilities on Ero Copper and IM Global 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 IM Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ero Copper and IM Global.
Diversification Opportunities for Ero Copper and IM Global
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ero and IRBA is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ero Copper Corp and IM Global Partner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IM Global Partner 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 IM Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IM Global Partner has no effect on the direction of Ero Copper i.e., Ero Copper and IM Global go up and down completely randomly.
Pair Corralation between Ero Copper and IM Global
Considering the 90-day investment horizon Ero Copper Corp is expected to generate 5.1 times more return on investment than IM Global. However, Ero Copper is 5.1 times more volatile than IM Global Partner. It trades about 0.03 of its potential returns per unit of risk. IM Global Partner is currently generating about 0.05 per unit of risk. If you would invest 1,267 in Ero Copper Corp on August 26, 2024 and sell it today you would earn a total of 294.00 from holding Ero Copper Corp or generate 23.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.79% |
| Values | Daily Returns |
Ero Copper Corp vs. IM Global Partner
Performance |
| Timeline |
| Ero Copper Corp |
| IM Global Partner |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ero Copper and IM Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ero Copper and IM Global
The main advantage of trading using opposite Ero Copper and IM Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ero Copper position performs unexpectedly, IM Global 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 IM Global will offset losses from the drop in IM Global's 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 |
| IM Global vs. Ero Copper Corp | IM Global vs. First Trust Exchange Traded | IM Global vs. Aquagold International | IM Global vs. Morningstar Unconstrained Allocation |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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