Correlation Between Southern Copper and Imperial Metals
Can any of the company-specific risk be diversified away by investing in both Southern Copper and Imperial Metals 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 Southern Copper and Imperial Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Copper and Imperial Metals, you can compare the effects of market volatilities on Southern Copper and Imperial Metals 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 Southern Copper with a short position of Imperial Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Copper and Imperial Metals.
Diversification Opportunities for Southern Copper and Imperial Metals
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Southern and Imperial is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Southern Copper and Imperial Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial Metals and Southern 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 Southern Copper are associated (or correlated) with Imperial Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperial Metals has no effect on the direction of Southern Copper i.e., Southern Copper and Imperial Metals go up and down completely randomly.
Pair Corralation between Southern Copper and Imperial Metals
Assuming the 90 days horizon Southern Copper is expected to generate 0.74 times more return on investment than Imperial Metals. However, Southern Copper is 1.35 times less risky than Imperial Metals. It trades about 0.04 of its potential returns per unit of risk. Imperial Metals is currently generating about 0.02 per unit of risk. If you would invest 5,971 in Southern Copper on December 4, 2024 and sell it today you would earn a total of 2,347 from holding Southern Copper or generate 39.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Southern Copper vs. Imperial Metals
Performance |
| Timeline |
| Southern Copper |
| Imperial Metals |
Southern Copper and Imperial Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Copper and Imperial Metals
The main advantage of trading using opposite Southern Copper and Imperial Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Copper position performs unexpectedly, Imperial Metals 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 Imperial Metals will offset losses from the drop in Imperial Metals' long position.| Southern Copper vs. Penn National Gaming | Southern Copper vs. CITIC Telecom International | Southern Copper vs. Cairo Communication SpA | Southern Copper vs. PLAYMATES TOYS |
| Imperial Metals vs. Cellnex Telecom SA | Imperial Metals vs. Chengdu PUTIAN Telecommunications | Imperial Metals vs. Harmony Gold Mining | Imperial Metals vs. De Grey Mining |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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