Correlation Between Libero Copper and CMC Metals
Can any of the company-specific risk be diversified away by investing in both Libero Copper and CMC Metals 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 Libero Copper and CMC Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Libero Copper Gold and CMC Metals, you can compare the effects of market volatilities on Libero Copper and CMC Metals 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 Libero Copper with a short position of CMC Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Libero Copper and CMC Metals.
Diversification Opportunities for Libero Copper and CMC Metals
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Libero and CMC is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Libero Copper Gold and CMC Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMC Metals and Libero 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 Libero Copper Gold are associated (or correlated) with CMC Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMC Metals has no effect on the direction of Libero Copper i.e., Libero Copper and CMC Metals go up and down completely randomly.
Pair Corralation between Libero Copper and CMC Metals
Assuming the 90 days horizon Libero Copper Gold is expected to under-perform the CMC Metals. But the otc stock apears to be less risky and, when comparing its historical volatility, Libero Copper Gold is 7.74 times less risky than CMC Metals. The otc stock trades about -0.2 of its potential returns per unit of risk. The CMC Metals is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1.00 in CMC Metals on November 5, 2024 and sell it today you would earn a total of 0.35 from holding CMC Metals or generate 35.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Libero Copper Gold vs. CMC Metals
Performance |
| Timeline |
| Libero Copper Gold |
| CMC Metals |
Libero Copper and CMC Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Libero Copper and CMC Metals
The main advantage of trading using opposite Libero Copper and CMC Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Libero Copper position performs unexpectedly, CMC Metals 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 CMC Metals will offset losses from the drop in CMC Metals' long position.| Libero Copper vs. Piedmont Lithium Ltd | Libero Copper vs. Sigma Lithium Resources | Libero Copper vs. Standard Lithium | Libero Copper vs. MP Materials Corp |
| CMC Metals vs. Bravo Mining Corp | CMC Metals vs. Southern Silver Exploration | CMC Metals vs. AbraSilver Resource Corp | CMC Metals vs. Outcrop Gold Corp |
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.
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