Correlation Between Marimaca Copper and Los Andes
Can any of the company-specific risk be diversified away by investing in both Marimaca Copper and Los Andes 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 Los Andes 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 Los Andes Copper, you can compare the effects of market volatilities on Marimaca Copper and Los Andes 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 Los Andes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marimaca Copper and Los Andes.
Diversification Opportunities for Marimaca Copper and Los Andes
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Marimaca and Los is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Marimaca Copper Corp and Los Andes Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Los Andes Copper 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 Los Andes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Los Andes Copper has no effect on the direction of Marimaca Copper i.e., Marimaca Copper and Los Andes go up and down completely randomly.
Pair Corralation between Marimaca Copper and Los Andes
Assuming the 90 days trading horizon Marimaca Copper Corp is expected to generate 0.57 times more return on investment than Los Andes. However, Marimaca Copper Corp is 1.76 times less risky than Los Andes. It trades about -0.1 of its potential returns per unit of risk. Los Andes Copper is currently generating about -0.07 per unit of risk. If you would invest 469.00 in Marimaca Copper Corp on September 15, 2024 and sell it today you would lose (28.00) from holding Marimaca Copper Corp or give up 5.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marimaca Copper Corp vs. Los Andes Copper
Performance |
| Timeline |
| Marimaca Copper Corp |
| Los Andes Copper |
Marimaca Copper and Los Andes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marimaca Copper and Los Andes
The main advantage of trading using opposite Marimaca Copper and Los Andes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marimaca Copper position performs unexpectedly, Los Andes 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 Los Andes will offset losses from the drop in Los Andes' long position.| Marimaca Copper vs. Arizona Sonoran Copper | Marimaca Copper vs. World Copper | Marimaca Copper vs. QC Copper and |
| Los Andes vs. Getty Copper | Los Andes vs. Marimaca Copper Corp | Los Andes vs. Globex Mining Enterprises | Los Andes vs. Arbor Metals 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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