Correlation Between Northern Graphite and Surge Copper
Can any of the company-specific risk be diversified away by investing in both Northern Graphite and Surge 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 Northern Graphite and Surge Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Graphite and Surge Copper Corp, you can compare the effects of market volatilities on Northern Graphite and Surge 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 Northern Graphite with a short position of Surge Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Graphite and Surge Copper.
Diversification Opportunities for Northern Graphite and Surge Copper
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Northern and Surge is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Northern Graphite and Surge Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge Copper Corp and Northern Graphite 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 Northern Graphite are associated (or correlated) with Surge Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Copper Corp has no effect on the direction of Northern Graphite i.e., Northern Graphite and Surge Copper go up and down completely randomly.
Pair Corralation between Northern Graphite and Surge Copper
Assuming the 90 days horizon Northern Graphite is expected to generate 1.53 times more return on investment than Surge Copper. However, Northern Graphite is 1.53 times more volatile than Surge Copper Corp. It trades about 0.02 of its potential returns per unit of risk. Surge Copper Corp is currently generating about -0.02 per unit of risk. If you would invest 8.90 in Northern Graphite on September 3, 2024 and sell it today you would lose (3.10) from holding Northern Graphite or give up 34.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern Graphite vs. Surge Copper Corp
Performance |
| Timeline |
| Northern Graphite |
| Surge Copper Corp |
Northern Graphite and Surge Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Graphite and Surge Copper
The main advantage of trading using opposite Northern Graphite and Surge Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Graphite position performs unexpectedly, Surge 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 Surge Copper will offset losses from the drop in Surge Copper's long position.| Northern Graphite vs. Focus Graphite | Northern Graphite vs. Mason Graphite | Northern Graphite vs. Graphite One | Northern Graphite vs. Syrah Resources Limited |
| Surge Copper vs. Pampa Metals | Surge Copper vs. Progressive Planet Solutions | Surge Copper vs. Searchlight Resources | Surge Copper vs. Durango Resources |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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