Correlation Between Marimaca Copper and Ero Copper
Can any of the company-specific risk be diversified away by investing in both Marimaca Copper 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 Marimaca Copper and Ero Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marimaca Copper Corp and Ero Copper Corp, you can compare the effects of market volatilities on Marimaca Copper 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 Marimaca Copper with a short position of Ero Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marimaca Copper and Ero Copper.
Diversification Opportunities for Marimaca Copper and Ero Copper
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Marimaca and Ero is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Marimaca Copper Corp 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 Marimaca 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 Marimaca Copper Corp 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 Marimaca Copper i.e., Marimaca Copper and Ero Copper go up and down completely randomly.
Pair Corralation between Marimaca Copper and Ero Copper
Assuming the 90 days trading horizon Marimaca Copper Corp is expected to generate 1.4 times more return on investment than Ero Copper. However, Marimaca Copper is 1.4 times more volatile than Ero Copper Corp. It trades about 0.17 of its potential returns per unit of risk. Ero Copper Corp is currently generating about -0.34 per unit of risk. If you would invest 422.00 in Marimaca Copper Corp on August 31, 2024 and sell it today you would earn a total of 62.00 from holding Marimaca Copper Corp or generate 14.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marimaca Copper Corp vs. Ero Copper Corp
Performance |
| Timeline |
| Marimaca Copper Corp |
| Ero Copper Corp |
Marimaca Copper and Ero Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marimaca Copper and Ero Copper
The main advantage of trading using opposite Marimaca Copper and Ero Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marimaca Copper 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.| Marimaca Copper vs. Solar Alliance Energy | Marimaca Copper vs. Global X Active | Marimaca Copper vs. Financial 15 Split | Marimaca Copper vs. Rubicon Organics |
| Ero Copper vs. SSR Mining | Ero Copper vs. MAG Silver Corp | Ero Copper vs. Torex Gold Resources | Ero Copper vs. Pan American 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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