Correlation Between Northwest Copper and Surge Copper
Can any of the company-specific risk be diversified away by investing in both Northwest Copper 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 Northwest Copper and Surge Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northwest Copper Corp and Surge Copper Corp, you can compare the effects of market volatilities on Northwest Copper 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 Northwest Copper with a short position of Surge Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northwest Copper and Surge Copper.
Diversification Opportunities for Northwest Copper and Surge Copper
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Northwest and Surge is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Northwest Copper Corp 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 Northwest 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 Northwest Copper Corp 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 Northwest Copper i.e., Northwest Copper and Surge Copper go up and down completely randomly.
Pair Corralation between Northwest Copper and Surge Copper
Assuming the 90 days trading horizon Northwest Copper Corp is expected to under-perform the Surge Copper. In addition to that, Northwest Copper is 1.07 times more volatile than Surge Copper Corp. It trades about -0.1 of its total potential returns per unit of risk. Surge Copper Corp is currently generating about -0.08 per unit of volatility. If you would invest 11.00 in Surge Copper Corp on August 25, 2024 and sell it today you would lose (1.50) from holding Surge Copper Corp or give up 13.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northwest Copper Corp vs. Surge Copper Corp
Performance |
| Timeline |
| Northwest Copper Corp |
| Surge Copper Corp |
Northwest Copper and Surge Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northwest Copper and Surge Copper
The main advantage of trading using opposite Northwest Copper and Surge Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northwest Copper 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.| Northwest Copper vs. Surge Copper Corp | Northwest Copper vs. Dore Copper Mining | Northwest Copper vs. Kodiak Copper Corp | Northwest Copper vs. QC Copper and |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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