Correlation Between Chakana Copper and Regulus Resources
Can any of the company-specific risk be diversified away by investing in both Chakana Copper and Regulus Resources 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 Chakana Copper and Regulus Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chakana Copper Corp and Regulus Resources, you can compare the effects of market volatilities on Chakana Copper and Regulus Resources 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 Chakana Copper with a short position of Regulus Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chakana Copper and Regulus Resources.
Diversification Opportunities for Chakana Copper and Regulus Resources
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chakana and Regulus is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Chakana Copper Corp and Regulus Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regulus Resources and Chakana 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 Chakana Copper Corp are associated (or correlated) with Regulus Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regulus Resources has no effect on the direction of Chakana Copper i.e., Chakana Copper and Regulus Resources go up and down completely randomly.
Pair Corralation between Chakana Copper and Regulus Resources
Assuming the 90 days trading horizon Chakana Copper Corp is expected to generate 5.5 times more return on investment than Regulus Resources. However, Chakana Copper is 5.5 times more volatile than Regulus Resources. It trades about 0.13 of its potential returns per unit of risk. Regulus Resources is currently generating about -0.16 per unit of risk. If you would invest 2.50 in Chakana Copper Corp on September 2, 2024 and sell it today you would earn a total of 0.50 from holding Chakana Copper Corp or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chakana Copper Corp vs. Regulus Resources
Performance |
| Timeline |
| Chakana Copper Corp |
| Regulus Resources |
Chakana Copper and Regulus Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chakana Copper and Regulus Resources
The main advantage of trading using opposite Chakana Copper and Regulus Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chakana Copper position performs unexpectedly, Regulus Resources 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 Regulus Resources will offset losses from the drop in Regulus Resources' long position.| Chakana Copper vs. Minaurum Gold | Chakana Copper vs. Dolly Varden Silver | Chakana Copper vs. Santacruz Silv | Chakana Copper vs. GoGold Resources |
| Regulus Resources vs. Kiplin Metals | Regulus Resources vs. Noram Lithium Corp | Regulus Resources vs. Minnova Corp |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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