Correlation Between Starbucks and Marimaca Copper
Can any of the company-specific risk be diversified away by investing in both Starbucks and Marimaca 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 Starbucks and Marimaca Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Starbucks and Marimaca Copper Corp, you can compare the effects of market volatilities on Starbucks and Marimaca 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 Starbucks with a short position of Marimaca Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Starbucks and Marimaca Copper.
Diversification Opportunities for Starbucks and Marimaca Copper
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Starbucks and Marimaca is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Starbucks and Marimaca Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marimaca Copper Corp and Starbucks 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 Starbucks are associated (or correlated) with Marimaca Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marimaca Copper Corp has no effect on the direction of Starbucks i.e., Starbucks and Marimaca Copper go up and down completely randomly.
Pair Corralation between Starbucks and Marimaca Copper
Given the investment horizon of 90 days Starbucks is expected to generate 1.01 times more return on investment than Marimaca Copper. However, Starbucks is 1.01 times more volatile than Marimaca Copper Corp. It trades about 0.41 of its potential returns per unit of risk. Marimaca Copper Corp is currently generating about 0.13 per unit of risk. If you would invest 9,217 in Starbucks on November 3, 2024 and sell it today you would earn a total of 1,551 from holding Starbucks or generate 16.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Starbucks vs. Marimaca Copper Corp
Performance |
| Timeline |
| Starbucks |
| Marimaca Copper Corp |
Starbucks and Marimaca Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Starbucks and Marimaca Copper
The main advantage of trading using opposite Starbucks and Marimaca Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Starbucks position performs unexpectedly, Marimaca 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 Marimaca Copper will offset losses from the drop in Marimaca Copper's long position.| Starbucks vs. Chipotle Mexican Grill | Starbucks vs. Dominos Pizza Common | Starbucks vs. Yum Brands | Starbucks vs. The Wendys Co |
| Marimaca Copper vs. Freeport McMoran Copper Gold | Marimaca Copper vs. Antofagasta PLC | Marimaca Copper vs. First Quantum Minerals | Marimaca Copper vs. Jiangxi Copper |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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