Correlation Between Lion Copper and Western Copper
Can any of the company-specific risk be diversified away by investing in both Lion Copper and Western 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 Lion Copper and Western Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion Copper and and Western Copper and, you can compare the effects of market volatilities on Lion Copper and Western 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 Lion Copper with a short position of Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Copper and Western Copper.
Diversification Opportunities for Lion Copper and Western Copper
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lion and Western is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Lion Copper and and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper and Lion 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 Lion Copper and are associated (or correlated) with Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of Lion Copper i.e., Lion Copper and Western Copper go up and down completely randomly.
Pair Corralation between Lion Copper and Western Copper
Assuming the 90 days horizon Lion Copper and is expected to generate 2.49 times more return on investment than Western Copper. However, Lion Copper is 2.49 times more volatile than Western Copper and. It trades about 0.04 of its potential returns per unit of risk. Western Copper and is currently generating about -0.02 per unit of risk. If you would invest 5.00 in Lion Copper and on September 3, 2024 and sell it today you would earn a total of 1.00 from holding Lion Copper and or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Copper and vs. Western Copper and
Performance |
| Timeline |
| Lion Copper |
| Western Copper |
Lion Copper and Western Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Copper and Western Copper
The main advantage of trading using opposite Lion Copper and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Copper position performs unexpectedly, Western 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 Western Copper will offset losses from the drop in Western Copper's long position.| Lion Copper vs. Qubec Nickel Corp | Lion Copper vs. IGO Limited | Lion Copper vs. Avarone Metals | Lion Copper vs. Adriatic Metals PLC |
| Western Copper vs. Fury Gold Mines | Western Copper vs. EMX Royalty Corp | Western Copper vs. Nevada King Gold | Western Copper vs. Aftermath Silver |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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