Correlation Between Kopernik Global and Free Market
Can any of the company-specific risk be diversified away by investing in both Kopernik Global and Free Market 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 Kopernik Global and Free Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kopernik Global All Cap and Free Market International, you can compare the effects of market volatilities on Kopernik Global and Free Market 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 Kopernik Global with a short position of Free Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kopernik Global and Free Market.
Diversification Opportunities for Kopernik Global and Free Market
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kopernik and Free is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Kopernik Global All Cap and Free Market International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Free Market International and Kopernik Global 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 Kopernik Global All Cap are associated (or correlated) with Free Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Free Market International has no effect on the direction of Kopernik Global i.e., Kopernik Global and Free Market go up and down completely randomly.
Pair Corralation between Kopernik Global and Free Market
Assuming the 90 days horizon Kopernik Global All Cap is expected to under-perform the Free Market. But the mutual fund apears to be less risky and, when comparing its historical volatility, Kopernik Global All Cap is 1.11 times less risky than Free Market. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Free Market International is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 1,207 in Free Market International on September 1, 2024 and sell it today you would lose (13.00) from holding Free Market International or give up 1.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kopernik Global All Cap vs. Free Market International
Performance |
| Timeline |
| Kopernik Global All |
| Free Market International |
Kopernik Global and Free Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kopernik Global and Free Market
The main advantage of trading using opposite Kopernik Global and Free Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kopernik Global position performs unexpectedly, Free Market 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 Free Market will offset losses from the drop in Free Market's long position.| Kopernik Global vs. Kopernik Global All Cap | Kopernik Global vs. Kopernik International Fund | Kopernik Global vs. Thrivent High Yield | Kopernik Global vs. Gateway Equity Call |
| Free Market vs. Touchstone Ultra Short | Free Market vs. Siit Ultra Short | Free Market vs. Astor Longshort Fund | Free Market vs. Franklin Federal Limited Term |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |