Correlation Between Southern Copper and Aurubis AG
Can any of the company-specific risk be diversified away by investing in both Southern Copper and Aurubis AG 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 Aurubis AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Copper and Aurubis AG, you can compare the effects of market volatilities on Southern Copper and Aurubis AG 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 Aurubis AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Copper and Aurubis AG.
Diversification Opportunities for Southern Copper and Aurubis AG
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Southern and Aurubis is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Southern Copper and Aurubis AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurubis AG 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 Aurubis AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurubis AG has no effect on the direction of Southern Copper i.e., Southern Copper and Aurubis AG go up and down completely randomly.
Pair Corralation between Southern Copper and Aurubis AG
Assuming the 90 days horizon Southern Copper is expected to under-perform the Aurubis AG. But the stock apears to be less risky and, when comparing its historical volatility, Southern Copper is 1.32 times less risky than Aurubis AG. The stock trades about -0.06 of its potential returns per unit of risk. The Aurubis AG is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 6,355 in Aurubis AG on September 13, 2024 and sell it today you would earn a total of 2,135 from holding Aurubis AG or generate 33.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Copper vs. Aurubis AG
Performance |
| Timeline |
| Southern Copper |
| Aurubis AG |
Southern Copper and Aurubis AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Copper and Aurubis AG
The main advantage of trading using opposite Southern Copper and Aurubis AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Copper position performs unexpectedly, Aurubis AG 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 Aurubis AG will offset losses from the drop in Aurubis AG's long position.| Southern Copper vs. Sandfire Resources Limited | Southern Copper vs. Superior Plus Corp | Southern Copper vs. NMI Holdings | Southern Copper vs. SIVERS SEMICONDUCTORS AB |
| Aurubis AG vs. Southern Copper | Aurubis AG vs. Sandfire Resources Limited | Aurubis AG vs. Superior Plus Corp | Aurubis AG vs. NMI Holdings |
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.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |