Correlation Between Faraday Copper and Ero Copper
Can any of the company-specific risk be diversified away by investing in both Faraday Copper and Ero 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 Faraday Copper and Ero Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Faraday Copper Corp and Ero Copper Corp, you can compare the effects of market volatilities on Faraday Copper and Ero 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 Faraday Copper with a short position of Ero Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faraday Copper and Ero Copper.
Diversification Opportunities for Faraday Copper and Ero Copper
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Faraday and Ero is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Copper Corp and Ero Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ero Copper Corp and Faraday 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 Faraday Copper Corp are associated (or correlated) with Ero Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ero Copper Corp has no effect on the direction of Faraday Copper i.e., Faraday Copper and Ero Copper go up and down completely randomly.
Pair Corralation between Faraday Copper and Ero Copper
Assuming the 90 days trading horizon Faraday Copper Corp is expected to generate 0.74 times more return on investment than Ero Copper. However, Faraday Copper Corp is 1.35 times less risky than Ero Copper. It trades about -0.16 of its potential returns per unit of risk. Ero Copper Corp is currently generating about -0.27 per unit of risk. If you would invest 90.00 in Faraday Copper Corp on September 1, 2024 and sell it today you would lose (7.00) from holding Faraday Copper Corp or give up 7.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Faraday Copper Corp vs. Ero Copper Corp
Performance |
| Timeline |
| Faraday Copper Corp |
| Ero Copper Corp |
Faraday Copper and Ero Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Faraday Copper and Ero Copper
The main advantage of trading using opposite Faraday Copper and Ero Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faraday Copper position performs unexpectedly, Ero 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 Ero Copper will offset losses from the drop in Ero Copper's long position.| Faraday Copper vs. Arizona Sonoran Copper | Faraday Copper vs. Filo Mining Corp | Faraday Copper vs. Marimaca Copper Corp |
| Ero Copper vs. First Majestic Silver | Ero Copper vs. Ivanhoe Energy | Ero Copper vs. Orezone Gold Corp | Ero Copper vs. Faraday Copper Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |