Correlation Between KGHM Polska and CopperCorp Resources
Can any of the company-specific risk be diversified away by investing in both KGHM Polska and CopperCorp Resources 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 KGHM Polska and CopperCorp Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KGHM Polska Miedz and CopperCorp Resources, you can compare the effects of market volatilities on KGHM Polska and CopperCorp Resources 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 KGHM Polska with a short position of CopperCorp Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of KGHM Polska and CopperCorp Resources.
Diversification Opportunities for KGHM Polska and CopperCorp Resources
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KGHM and CopperCorp is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding KGHM Polska Miedz and CopperCorp Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CopperCorp Resources and KGHM Polska 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 KGHM Polska Miedz are associated (or correlated) with CopperCorp Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CopperCorp Resources has no effect on the direction of KGHM Polska i.e., KGHM Polska and CopperCorp Resources go up and down completely randomly.
Pair Corralation between KGHM Polska and CopperCorp Resources
If you would invest 8.38 in CopperCorp Resources on September 1, 2024 and sell it today you would earn a total of 5.62 from holding CopperCorp Resources or generate 67.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
KGHM Polska Miedz vs. CopperCorp Resources
Performance |
| Timeline |
| KGHM Polska Miedz |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CopperCorp Resources |
KGHM Polska and CopperCorp Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KGHM Polska and CopperCorp Resources
The main advantage of trading using opposite KGHM Polska and CopperCorp Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KGHM Polska position performs unexpectedly, CopperCorp Resources 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 CopperCorp Resources will offset losses from the drop in CopperCorp Resources' long position.| KGHM Polska vs. Bell Copper | KGHM Polska vs. Arizona Sonoran Copper | KGHM Polska vs. CopperCorp Resources | KGHM Polska vs. Dor Copper Mining |
| CopperCorp Resources vs. Copper Fox Metals | CopperCorp Resources vs. Imperial Metals | CopperCorp Resources vs. Bell Copper | CopperCorp Resources vs. Arizona Sonoran Copper |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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