Correlation Between Ero Copper and Southern Copper
Can any of the company-specific risk be diversified away by investing in both Ero Copper and Southern 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 Ero Copper and Southern Copper 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 Southern Copper, you can compare the effects of market volatilities on Ero Copper and Southern 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 Ero Copper with a short position of Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ero Copper and Southern Copper.
Diversification Opportunities for Ero Copper and Southern Copper
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ero and Southern is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ero Copper Corp and Southern Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper 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 Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper has no effect on the direction of Ero Copper i.e., Ero Copper and Southern Copper go up and down completely randomly.
Pair Corralation between Ero Copper and Southern Copper
Considering the 90-day investment horizon Ero Copper Corp is expected to under-perform the Southern Copper. In addition to that, Ero Copper is 1.35 times more volatile than Southern Copper. It trades about -0.01 of its total potential returns per unit of risk. Southern Copper is currently generating about 0.06 per unit of volatility. If you would invest 6,678 in Southern Copper on August 28, 2024 and sell it today you would earn a total of 3,523 from holding Southern Copper or generate 52.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ero Copper Corp vs. Southern Copper
Performance |
| Timeline |
| Ero Copper Corp |
| Southern Copper |
Ero Copper and Southern Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ero Copper and Southern Copper
The main advantage of trading using opposite Ero Copper and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ero Copper position performs unexpectedly, Southern 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 Southern Copper will offset losses from the drop in Southern Copper'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 |
| Southern Copper vs. Ero Copper Corp | Southern Copper vs. Hudbay Minerals | Southern Copper vs. Taseko Mines | Southern Copper vs. Amerigo Resources |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Global Correlations Find global opportunities by holding instruments from different markets |