Correlation Between Imperial Metals and Nevada Copper
Can any of the company-specific risk be diversified away by investing in both Imperial Metals and Nevada 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 Imperial Metals and Nevada Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imperial Metals and Nevada Copper Corp, you can compare the effects of market volatilities on Imperial Metals and Nevada 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 Imperial Metals with a short position of Nevada Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imperial Metals and Nevada Copper.
Diversification Opportunities for Imperial Metals and Nevada Copper
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Imperial and Nevada is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Imperial Metals and Nevada Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nevada Copper Corp and Imperial Metals 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 Imperial Metals are associated (or correlated) with Nevada Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nevada Copper Corp has no effect on the direction of Imperial Metals i.e., Imperial Metals and Nevada Copper go up and down completely randomly.
Pair Corralation between Imperial Metals and Nevada Copper
Assuming the 90 days horizon Imperial Metals is expected to generate 0.33 times more return on investment than Nevada Copper. However, Imperial Metals is 3.0 times less risky than Nevada Copper. It trades about 0.01 of its potential returns per unit of risk. Nevada Copper Corp is currently generating about -0.05 per unit of risk. If you would invest 151.00 in Imperial Metals on September 1, 2024 and sell it today you would lose (1.00) from holding Imperial Metals or give up 0.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 71.38% |
| Values | Daily Returns |
Imperial Metals vs. Nevada Copper Corp
Performance |
| Timeline |
| Imperial Metals |
| Nevada Copper Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Imperial Metals and Nevada Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imperial Metals and Nevada Copper
The main advantage of trading using opposite Imperial Metals and Nevada Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imperial Metals position performs unexpectedly, Nevada 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 Nevada Copper will offset losses from the drop in Nevada Copper's long position.| Imperial Metals vs. South32 Limited | Imperial Metals vs. NioCorp Developments Ltd | Imperial Metals vs. HUMANA INC | Imperial Metals vs. SCOR PK |
| Nevada Copper vs. Ero Copper Corp | Nevada Copper vs. Copperbank Resources Corp | Nevada Copper vs. Copper Mountain Mining | Nevada Copper 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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