Correlation Between Highland Copper and Copper Mountain
Can any of the company-specific risk be diversified away by investing in both Highland Copper and Copper Mountain 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 Highland Copper and Copper Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highland Copper and Copper Mountain Mining, you can compare the effects of market volatilities on Highland Copper and Copper Mountain 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 Highland Copper with a short position of Copper Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Copper and Copper Mountain.
Diversification Opportunities for Highland Copper and Copper Mountain
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Highland and Copper is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Highland Copper and Copper Mountain Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper Mountain Mining and Highland 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 Highland Copper are associated (or correlated) with Copper Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper Mountain Mining has no effect on the direction of Highland Copper i.e., Highland Copper and Copper Mountain go up and down completely randomly.
Pair Corralation between Highland Copper and Copper Mountain
Assuming the 90 days horizon Highland Copper is expected to generate 83.3 times less return on investment than Copper Mountain. But when comparing it to its historical volatility, Highland Copper is 26.18 times less risky than Copper Mountain. It trades about 0.06 of its potential returns per unit of risk. Copper Mountain Mining is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Copper Mountain Mining on September 1, 2024 and sell it today you would earn a total of 20.00 from holding Copper Mountain Mining or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.15% |
| Values | Daily Returns |
Highland Copper vs. Copper Mountain Mining
Performance |
| Timeline |
| Highland Copper |
| Copper Mountain Mining |
Highland Copper and Copper Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Copper and Copper Mountain
The main advantage of trading using opposite Highland Copper and Copper Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Copper position performs unexpectedly, Copper Mountain 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 Copper Mountain will offset losses from the drop in Copper Mountain's long position.| Highland Copper vs. South32 Limited | Highland Copper vs. NioCorp Developments Ltd | Highland Copper vs. HUMANA INC | Highland Copper vs. SCOR PK |
| Copper Mountain vs. Ero Copper Corp | Copper Mountain vs. Copper Fox Metals | Copper Mountain vs. First Quantum Minerals | Copper Mountain vs. Hudbay Minerals |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |