Correlation Between Kodiak Copper and Arras Minerals

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Can any of the company-specific risk be diversified away by investing in both Kodiak Copper and Arras Minerals 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 Arras Minerals 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 Arras Minerals Corp, you can compare the effects of market volatilities on Kodiak Copper and Arras Minerals 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 Arras Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kodiak Copper and Arras Minerals.

Diversification Opportunities for Kodiak Copper and Arras Minerals

-0.15
  Correlation Coefficient

Good diversification

The 3 months correlation between Kodiak and Arras is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kodiak Copper Corp and Arras Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arras Minerals 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 Arras Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arras Minerals Corp has no effect on the direction of Kodiak Copper i.e., Kodiak Copper and Arras Minerals go up and down completely randomly.

Pair Corralation between Kodiak Copper and Arras Minerals

Assuming the 90 days horizon Kodiak Copper Corp is expected to under-perform the Arras Minerals. But the otc stock apears to be less risky and, when comparing its historical volatility, Kodiak Copper Corp is 1.75 times less risky than Arras Minerals. The otc stock trades about -0.05 of its potential returns per unit of risk. The Arras Minerals Corp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  26.00  in Arras Minerals Corp on August 30, 2024 and sell it today you would lose (3.00) from holding Arras Minerals Corp or give up 11.54% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Kodiak Copper Corp  vs.  Arras Minerals Corp

 Performance 
       Timeline  
Kodiak Copper Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Kodiak Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Kodiak Copper is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
Arras Minerals Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Arras Minerals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, Arras Minerals is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Kodiak Copper and Arras Minerals Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kodiak Copper and Arras Minerals

The main advantage of trading using opposite Kodiak Copper and Arras Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kodiak Copper position performs unexpectedly, Arras Minerals 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 Arras Minerals will offset losses from the drop in Arras Minerals' long position.
The idea behind Kodiak Copper Corp and Arras Minerals Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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