Correlation Between Imperial Metals and World Copper
Can any of the company-specific risk be diversified away by investing in both Imperial Metals and World 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 World 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 World Copper, you can compare the effects of market volatilities on Imperial Metals and World 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 World Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imperial Metals and World Copper.
Diversification Opportunities for Imperial Metals and World Copper
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Imperial and World is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Imperial Metals and World Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Copper 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 World Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Copper has no effect on the direction of Imperial Metals i.e., Imperial Metals and World Copper go up and down completely randomly.
Pair Corralation between Imperial Metals and World Copper
Assuming the 90 days horizon Imperial Metals is expected to generate 0.55 times more return on investment than World Copper. However, Imperial Metals is 1.81 times less risky than World Copper. It trades about 0.0 of its potential returns per unit of risk. World Copper is currently generating about -0.1 per unit of risk. If you would invest 153.00 in Imperial Metals on September 5, 2024 and sell it today you would lose (1.00) from holding Imperial Metals or give up 0.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imperial Metals vs. World Copper
Performance |
| Timeline |
| Imperial Metals |
| World Copper |
Imperial Metals and World Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imperial Metals and World Copper
The main advantage of trading using opposite Imperial Metals and World Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imperial Metals position performs unexpectedly, World 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 World Copper will offset losses from the drop in World Copper's long position.| Imperial Metals vs. Advantage Solutions | Imperial Metals vs. Atlas Corp | Imperial Metals vs. PureCycle Technologies | Imperial Metals vs. WM Technology |
| World Copper vs. Copper Fox Metals | World Copper vs. Imperial Metals | World Copper vs. Bell Copper | World Copper vs. Dor Copper Mining |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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