Correlation Between Kodiak Copper and Northwest Copper
Can any of the company-specific risk be diversified away by investing in both Kodiak Copper and Northwest 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 Kodiak Copper and Northwest Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kodiak Copper Corp and Northwest Copper Corp, you can compare the effects of market volatilities on Kodiak Copper and Northwest 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 Kodiak Copper with a short position of Northwest Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kodiak Copper and Northwest Copper.
Diversification Opportunities for Kodiak Copper and Northwest Copper
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kodiak and Northwest is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Kodiak Copper Corp and Northwest Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northwest Copper Corp and Kodiak 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 Kodiak Copper Corp are associated (or correlated) with Northwest Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northwest Copper Corp has no effect on the direction of Kodiak Copper i.e., Kodiak Copper and Northwest Copper go up and down completely randomly.
Pair Corralation between Kodiak Copper and Northwest Copper
Assuming the 90 days horizon Kodiak Copper Corp is expected to generate 0.43 times more return on investment than Northwest Copper. However, Kodiak Copper Corp is 2.33 times less risky than Northwest Copper. It trades about -0.19 of its potential returns per unit of risk. Northwest Copper Corp is currently generating about -0.11 per unit of risk. If you would invest 46.00 in Kodiak Copper Corp on August 29, 2024 and sell it today you would lose (5.00) from holding Kodiak Copper Corp or give up 10.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kodiak Copper Corp vs. Northwest Copper Corp
Performance |
| Timeline |
| Kodiak Copper Corp |
| Northwest Copper Corp |
Kodiak Copper and Northwest Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kodiak Copper and Northwest Copper
The main advantage of trading using opposite Kodiak Copper and Northwest Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kodiak Copper position performs unexpectedly, Northwest 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 Northwest Copper will offset losses from the drop in Northwest Copper's long position.| Kodiak Copper vs. First Majestic Silver | Kodiak Copper vs. Ivanhoe Energy | Kodiak Copper vs. Orezone Gold Corp | Kodiak Copper vs. Faraday Copper Corp |
| Northwest Copper vs. Surge Copper Corp | Northwest Copper vs. Dore Copper Mining | Northwest Copper vs. Kodiak Copper Corp | Northwest Copper vs. QC Copper and |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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