Correlation Between Kering SA and Western Copper
Can any of the company-specific risk be diversified away by investing in both Kering SA and Western 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 Kering SA and Western Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kering SA and Western Copper and, you can compare the effects of market volatilities on Kering SA and Western 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 Kering SA with a short position of Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kering SA and Western Copper.
Diversification Opportunities for Kering SA and Western Copper
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kering and Western is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Kering SA and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper and Kering SA 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 Kering SA are associated (or correlated) with Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of Kering SA i.e., Kering SA and Western Copper go up and down completely randomly.
Pair Corralation between Kering SA and Western Copper
Assuming the 90 days trading horizon Kering SA is expected to under-perform the Western Copper. But the stock apears to be less risky and, when comparing its historical volatility, Kering SA is 1.4 times less risky than Western Copper. The stock trades about -0.03 of its potential returns per unit of risk. The Western Copper and is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 104.00 in Western Copper and on October 9, 2024 and sell it today you would earn a total of 0.00 from holding Western Copper and or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.37% |
| Values | Daily Returns |
Kering SA vs. Western Copper and
Performance |
| Timeline |
| Kering SA |
| Western Copper |
Kering SA and Western Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kering SA and Western Copper
The main advantage of trading using opposite Kering SA and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kering SA position performs unexpectedly, Western 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 Western Copper will offset losses from the drop in Western Copper's long position.| Kering SA vs. Delta Electronics Public | Kering SA vs. TT Electronics PLC | Kering SA vs. LG Electronics | Kering SA vs. Richardson Electronics |
| Western Copper vs. Gold Road Resources | Western Copper vs. COPLAND ROAD CAPITAL | Western Copper vs. GOLD ROAD RES | Western Copper vs. TITANIUM TRANSPORTGROUP |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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