Correlation Between First National and Alta Copper
Can any of the company-specific risk be diversified away by investing in both First National and Alta 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 First National and Alta Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First National Financial and Alta Copper Corp, you can compare the effects of market volatilities on First National and Alta 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 First National with a short position of Alta Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of First National and Alta Copper.
Diversification Opportunities for First National and Alta Copper
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Alta is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding First National Financial and Alta Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alta Copper Corp and First National 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 First National Financial are associated (or correlated) with Alta Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alta Copper Corp has no effect on the direction of First National i.e., First National and Alta Copper go up and down completely randomly.
Pair Corralation between First National and Alta Copper
Assuming the 90 days trading horizon First National Financial is expected to generate 0.37 times more return on investment than Alta Copper. However, First National Financial is 2.7 times less risky than Alta Copper. It trades about 0.11 of its potential returns per unit of risk. Alta Copper Corp is currently generating about -0.18 per unit of risk. If you would invest 1,450 in First National Financial on September 3, 2024 and sell it today you would earn a total of 30.00 from holding First National Financial or generate 2.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First National Financial vs. Alta Copper Corp
Performance |
| Timeline |
| First National Financial |
| Alta Copper Corp |
First National and Alta Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First National and Alta Copper
The main advantage of trading using opposite First National and Alta Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First National position performs unexpectedly, Alta 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 Alta Copper will offset losses from the drop in Alta Copper's long position.| First National vs. Apple Inc CDR | First National vs. Microsoft Corp CDR | First National vs. Amazon CDR | First National vs. Alphabet Inc CDR |
| Alta Copper vs. Verizon Communications CDR | Alta Copper vs. Dream Office Real | Alta Copper vs. Profound Medical Corp | Alta Copper vs. Canso Select Opportunities |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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