Correlation Between Northern Minerals and American Copper
Can any of the company-specific risk be diversified away by investing in both Northern Minerals and American 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 Minerals and American Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Minerals Exploration and American Copper Development, you can compare the effects of market volatilities on Northern Minerals and American 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 Minerals with a short position of American Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Minerals and American Copper.
Diversification Opportunities for Northern Minerals and American Copper
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Northern and American is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Northern Minerals Exploration and American Copper Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Copper Deve and Northern Minerals 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 Minerals Exploration are associated (or correlated) with American Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Copper Deve has no effect on the direction of Northern Minerals i.e., Northern Minerals and American Copper go up and down completely randomly.
Pair Corralation between Northern Minerals and American Copper
Given the investment horizon of 90 days Northern Minerals Exploration is expected to under-perform the American Copper. But the pink sheet apears to be less risky and, when comparing its historical volatility, Northern Minerals Exploration is 1.44 times less risky than American Copper. The pink sheet trades about -0.04 of its potential returns per unit of risk. The American Copper Development is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3.06 in American Copper Development on November 3, 2024 and sell it today you would lose (0.66) from holding American Copper Development or give up 21.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Northern Minerals Exploration vs. American Copper Development
Performance |
| Timeline |
| Northern Minerals |
| American Copper Deve |
Northern Minerals and American Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Minerals and American Copper
The main advantage of trading using opposite Northern Minerals and American Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Minerals position performs unexpectedly, American 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 American Copper will offset losses from the drop in American Copper's long position.| Northern Minerals vs. American Copper Development | Northern Minerals vs. Triple Flag Precious | Northern Minerals vs. Hecla Mining | Northern Minerals vs. Compania de Minas |
| American Copper vs. EastGroup Properties | American Copper vs. National CineMedia | American Copper vs. Catalyst Metals Limited | American Copper vs. Fluent Inc |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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