Correlation Between Pacific Ridge and Kodiak Copper
Can any of the company-specific risk be diversified away by investing in both Pacific Ridge and Kodiak 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 Pacific Ridge and Kodiak Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Ridge Exploration and Kodiak Copper Corp, you can compare the effects of market volatilities on Pacific Ridge and Kodiak 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 Pacific Ridge with a short position of Kodiak Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Ridge and Kodiak Copper.
Diversification Opportunities for Pacific Ridge and Kodiak Copper
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pacific and Kodiak is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Ridge Exploration and Kodiak Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kodiak Copper Corp and Pacific Ridge 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 Pacific Ridge Exploration are associated (or correlated) with Kodiak Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kodiak Copper Corp has no effect on the direction of Pacific Ridge i.e., Pacific Ridge and Kodiak Copper go up and down completely randomly.
Pair Corralation between Pacific Ridge and Kodiak Copper
Assuming the 90 days horizon Pacific Ridge Exploration is expected to under-perform the Kodiak Copper. In addition to that, Pacific Ridge is 2.15 times more volatile than Kodiak Copper Corp. It trades about -0.04 of its total potential returns per unit of risk. Kodiak Copper Corp is currently generating about 0.19 per unit of volatility. If you would invest 29.00 in Kodiak Copper Corp on November 28, 2024 and sell it today you would earn a total of 5.00 from holding Kodiak Copper Corp or generate 17.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacific Ridge Exploration vs. Kodiak Copper Corp
Performance |
| Timeline |
| Pacific Ridge Exploration |
| Kodiak Copper Corp |
Pacific Ridge and Kodiak Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Ridge and Kodiak Copper
The main advantage of trading using opposite Pacific Ridge and Kodiak Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Ridge position performs unexpectedly, Kodiak 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 Kodiak Copper will offset losses from the drop in Kodiak Copper's long position.| Pacific Ridge vs. Alien Metals | Pacific Ridge vs. Cartier Iron Corp | Pacific Ridge vs. Arctic Star Exploration | Pacific Ridge vs. Denarius Silver Corp |
| Kodiak Copper vs. Silver Tiger Metals | Kodiak Copper vs. P2 Gold | Kodiak Copper vs. Integra Resources Corp | Kodiak Copper vs. Cartier Iron 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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