Correlation Between K92 Mining and Ero Copper
Can any of the company-specific risk be diversified away by investing in both K92 Mining and Ero 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 K92 Mining and Ero Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between K92 Mining and Ero Copper Corp, you can compare the effects of market volatilities on K92 Mining and Ero 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 K92 Mining with a short position of Ero Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of K92 Mining and Ero Copper.
Diversification Opportunities for K92 Mining and Ero Copper
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between K92 and Ero is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding K92 Mining and Ero Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ero Copper Corp and K92 Mining 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 K92 Mining are associated (or correlated) with Ero Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ero Copper Corp has no effect on the direction of K92 Mining i.e., K92 Mining and Ero Copper go up and down completely randomly.
Pair Corralation between K92 Mining and Ero Copper
Assuming the 90 days trading horizon K92 Mining is expected to generate 1.09 times more return on investment than Ero Copper. However, K92 Mining is 1.09 times more volatile than Ero Copper Corp. It trades about 0.06 of its potential returns per unit of risk. Ero Copper Corp is currently generating about -0.01 per unit of risk. If you would invest 574.00 in K92 Mining on August 28, 2024 and sell it today you would earn a total of 331.00 from holding K92 Mining or generate 57.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
K92 Mining vs. Ero Copper Corp
Performance |
| Timeline |
| K92 Mining |
| Ero Copper Corp |
K92 Mining and Ero Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K92 Mining and Ero Copper
The main advantage of trading using opposite K92 Mining and Ero Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K92 Mining position performs unexpectedly, Ero 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 Ero Copper will offset losses from the drop in Ero Copper's long position.| K92 Mining vs. Calibre Mining Corp | K92 Mining vs. Wesdome Gold Mines | K92 Mining vs. Equinox Gold Corp | K92 Mining vs. Orla Mining |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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