Correlation Between Getty Copper and Los Andes

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Can any of the company-specific risk be diversified away by investing in both Getty Copper and Los Andes 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 Getty Copper and Los Andes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Getty Copper and Los Andes Copper, you can compare the effects of market volatilities on Getty Copper and Los Andes 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 Getty Copper with a short position of Los Andes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Copper and Los Andes.

Diversification Opportunities for Getty Copper and Los Andes

0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Getty and Los is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Getty Copper and Los Andes Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Los Andes Copper and Getty 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 Getty Copper are associated (or correlated) with Los Andes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Los Andes Copper has no effect on the direction of Getty Copper i.e., Getty Copper and Los Andes go up and down completely randomly.

Pair Corralation between Getty Copper and Los Andes

Assuming the 90 days horizon Getty Copper is expected to under-perform the Los Andes. But the stock apears to be less risky and, when comparing its historical volatility, Getty Copper is 1.65 times less risky than Los Andes. The stock trades about -0.21 of its potential returns per unit of risk. The Los Andes Copper is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  790.00  in Los Andes Copper on September 15, 2024 and sell it today you would lose (65.00) from holding Los Andes Copper or give up 8.23% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Getty Copper  vs.  Los Andes Copper

 Performance 
       Timeline  
Getty Copper 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Getty Copper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.
Los Andes Copper 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Los Andes Copper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Getty Copper and Los Andes Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Getty Copper and Los Andes

The main advantage of trading using opposite Getty Copper and Los Andes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Copper position performs unexpectedly, Los Andes 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 Los Andes will offset losses from the drop in Los Andes' long position.
The idea behind Getty Copper and Los Andes Copper pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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