Correlation Between Kodiak Copper and Western Alaska
Can any of the company-specific risk be diversified away by investing in both Kodiak Copper and Western Alaska 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 Western Alaska 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 Western Alaska Minerals, you can compare the effects of market volatilities on Kodiak Copper and Western Alaska 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 Western Alaska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kodiak Copper and Western Alaska.
Diversification Opportunities for Kodiak Copper and Western Alaska
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kodiak and Western is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Kodiak Copper Corp and Western Alaska Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Alaska Minerals 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 Western Alaska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Alaska Minerals has no effect on the direction of Kodiak Copper i.e., Kodiak Copper and Western Alaska go up and down completely randomly.
Pair Corralation between Kodiak Copper and Western Alaska
Assuming the 90 days horizon Kodiak Copper Corp is expected to generate 0.68 times more return on investment than Western Alaska. However, Kodiak Copper Corp is 1.47 times less risky than Western Alaska. It trades about 0.23 of its potential returns per unit of risk. Western Alaska Minerals is currently generating about 0.11 per unit of risk. If you would invest 25.00 in Kodiak Copper Corp on November 3, 2024 and sell it today you would earn a total of 5.00 from holding Kodiak Copper Corp or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kodiak Copper Corp vs. Western Alaska Minerals
Performance |
| Timeline |
| Kodiak Copper Corp |
| Western Alaska Minerals |
Kodiak Copper and Western Alaska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kodiak Copper and Western Alaska
The main advantage of trading using opposite Kodiak Copper and Western Alaska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kodiak Copper position performs unexpectedly, Western Alaska 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 Western Alaska will offset losses from the drop in Western Alaska's long position.| Kodiak Copper vs. Silver Tiger Metals | Kodiak Copper vs. P2 Gold | Kodiak Copper vs. Integra Resources Corp | Kodiak Copper vs. SilverCrest Metals |
| Western Alaska vs. First Tellurium Corp | Western Alaska vs. Max Resource Corp | Western Alaska vs. P2 Gold | Western Alaska vs. CMC Metals |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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