Correlation Between Caltagirone SpA and Western Copper
Can any of the company-specific risk be diversified away by investing in both Caltagirone SpA 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 Caltagirone SpA and Western Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caltagirone SpA and Western Copper and, you can compare the effects of market volatilities on Caltagirone SpA 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 Caltagirone SpA with a short position of Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caltagirone SpA and Western Copper.
Diversification Opportunities for Caltagirone SpA and Western Copper
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Caltagirone and Western is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Caltagirone SpA and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper and Caltagirone SpA 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 Caltagirone SpA 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 Caltagirone SpA i.e., Caltagirone SpA and Western Copper go up and down completely randomly.
Pair Corralation between Caltagirone SpA and Western Copper
Assuming the 90 days trading horizon Caltagirone SpA is expected to generate 0.65 times more return on investment than Western Copper. However, Caltagirone SpA is 1.55 times less risky than Western Copper. It trades about 0.07 of its potential returns per unit of risk. Western Copper and is currently generating about -0.02 per unit of risk. If you would invest 506.00 in Caltagirone SpA on August 30, 2024 and sell it today you would earn a total of 90.00 from holding Caltagirone SpA or generate 17.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caltagirone SpA vs. Western Copper and
Performance |
| Timeline |
| Caltagirone SpA |
| Western Copper |
Caltagirone SpA and Western Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caltagirone SpA and Western Copper
The main advantage of trading using opposite Caltagirone SpA and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caltagirone SpA 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.| Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc |
| Western Copper vs. SBA Communications Corp | Western Copper vs. Tower One Wireless | Western Copper vs. Cleanaway Waste Management | Western Copper vs. Scandinavian Tobacco Group |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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