Correlation Between Highway Holdings and Copperbank Resources
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Copperbank Resources 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 Highway Holdings and Copperbank Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highway Holdings Limited and Copperbank Resources Corp, you can compare the effects of market volatilities on Highway Holdings and Copperbank Resources 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 Highway Holdings with a short position of Copperbank Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Copperbank Resources.
Diversification Opportunities for Highway Holdings and Copperbank Resources
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Highway and Copperbank is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Copperbank Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copperbank Resources Corp and Highway Holdings 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 Highway Holdings Limited are associated (or correlated) with Copperbank Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copperbank Resources Corp has no effect on the direction of Highway Holdings i.e., Highway Holdings and Copperbank Resources go up and down completely randomly.
Pair Corralation between Highway Holdings and Copperbank Resources
Given the investment horizon of 90 days Highway Holdings is expected to generate 1.98 times less return on investment than Copperbank Resources. But when comparing it to its historical volatility, Highway Holdings Limited is 1.72 times less risky than Copperbank Resources. It trades about 0.04 of its potential returns per unit of risk. Copperbank Resources Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 52.00 in Copperbank Resources Corp on October 20, 2024 and sell it today you would earn a total of 1.00 from holding Copperbank Resources Corp or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highway Holdings Limited vs. Copperbank Resources Corp
Performance |
| Timeline |
| Highway Holdings |
| Copperbank Resources Corp |
Highway Holdings and Copperbank Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and Copperbank Resources
The main advantage of trading using opposite Highway Holdings and Copperbank Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Copperbank Resources 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 Copperbank Resources will offset losses from the drop in Copperbank Resources' long position.| Highway Holdings vs. Deswell Industries | Highway Holdings vs. Euro Tech Holdings | Highway Holdings vs. China Natural Resources | Highway Holdings vs. Arts Way Manufacturing Co |
| Copperbank Resources vs. Bell Copper | Copperbank Resources vs. Arizona Sonoran Copper | Copperbank Resources vs. Dor Copper Mining | Copperbank Resources vs. CopperCorp 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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