Correlation Between Litigation Capital and Southern Copper
Can any of the company-specific risk be diversified away by investing in both Litigation Capital and Southern 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 Litigation Capital and Southern Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Litigation Capital Management and Southern Copper Corp, you can compare the effects of market volatilities on Litigation Capital and Southern 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 Litigation Capital with a short position of Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Litigation Capital and Southern Copper.
Diversification Opportunities for Litigation Capital and Southern Copper
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Litigation and Southern is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Litigation Capital Management and Southern Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper Corp and Litigation Capital 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 Litigation Capital Management are associated (or correlated) with Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper Corp has no effect on the direction of Litigation Capital i.e., Litigation Capital and Southern Copper go up and down completely randomly.
Pair Corralation between Litigation Capital and Southern Copper
Assuming the 90 days trading horizon Litigation Capital Management is expected to under-perform the Southern Copper. But the stock apears to be less risky and, when comparing its historical volatility, Litigation Capital Management is 1.15 times less risky than Southern Copper. The stock trades about -0.22 of its potential returns per unit of risk. The Southern Copper Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 10,232 in Southern Copper Corp on September 13, 2024 and sell it today you would earn a total of 194.00 from holding Southern Copper Corp or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Litigation Capital Management vs. Southern Copper Corp
Performance |
| Timeline |
| Litigation Capital |
| Southern Copper Corp |
Litigation Capital and Southern Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Litigation Capital and Southern Copper
The main advantage of trading using opposite Litigation Capital and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Litigation Capital position performs unexpectedly, Southern 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 Southern Copper will offset losses from the drop in Southern Copper's long position.| Litigation Capital vs. Intuitive Investments Group | Litigation Capital vs. Universal Display Corp | Litigation Capital vs. Batm Advanced Communications | Litigation Capital vs. Arrow Electronics |
| Southern Copper vs. Electronic Arts | Southern Copper vs. Impax Asset Management | Southern Copper vs. Dentsply Sirona | Southern Copper vs. Southwest Airlines Co |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |