Correlation Between NorthIsle Copper and Western Copper
Can any of the company-specific risk be diversified away by investing in both NorthIsle Copper and Western 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 NorthIsle Copper and Western Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NorthIsle Copper and and Western Copper and, you can compare the effects of market volatilities on NorthIsle Copper and Western 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 NorthIsle Copper with a short position of Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of NorthIsle Copper and Western Copper.
Diversification Opportunities for NorthIsle Copper and Western Copper
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between NorthIsle and Western is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding NorthIsle Copper and and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper and NorthIsle 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 NorthIsle Copper and are associated (or correlated) with Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of NorthIsle Copper i.e., NorthIsle Copper and Western Copper go up and down completely randomly.
Pair Corralation between NorthIsle Copper and Western Copper
Assuming the 90 days horizon NorthIsle Copper and is expected to generate 2.91 times more return on investment than Western Copper. However, NorthIsle Copper is 2.91 times more volatile than Western Copper and. It trades about 0.06 of its potential returns per unit of risk. Western Copper and is currently generating about -0.01 per unit of risk. If you would invest 14.00 in NorthIsle Copper and on August 24, 2024 and sell it today you would earn a total of 19.00 from holding NorthIsle Copper and or generate 135.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
NorthIsle Copper and vs. Western Copper and
Performance |
| Timeline |
| NorthIsle Copper |
| Western Copper |
NorthIsle Copper and Western Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NorthIsle Copper and Western Copper
The main advantage of trading using opposite NorthIsle Copper and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NorthIsle Copper position performs unexpectedly, Western 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 Western Copper will offset losses from the drop in Western Copper's long position.| NorthIsle Copper vs. Ascendant Resources | NorthIsle Copper vs. Cantex Mine Development | NorthIsle Copper vs. Amarc Resources | NorthIsle Copper vs. Sterling Metals Corp |
| Western Copper vs. Fury Gold Mines | Western Copper vs. EMX Royalty Corp | Western Copper vs. Nevada King Gold | Western Copper vs. Aftermath 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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