Correlation Between Southern Copper and IShares Global
Can any of the company-specific risk be diversified away by investing in both Southern Copper and IShares Global 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 Southern Copper and IShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Copper and iShares Global Timber, you can compare the effects of market volatilities on Southern Copper and IShares Global 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 Southern Copper with a short position of IShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Copper and IShares Global.
Diversification Opportunities for Southern Copper and IShares Global
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Southern and IShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Southern Copper and iShares Global Timber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Timber and Southern 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 Southern Copper are associated (or correlated) with IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Timber has no effect on the direction of Southern Copper i.e., Southern Copper and IShares Global go up and down completely randomly.
Pair Corralation between Southern Copper and IShares Global
Assuming the 90 days trading horizon Southern Copper is expected to generate 25.68 times more return on investment than IShares Global. However, Southern Copper is 25.68 times more volatile than iShares Global Timber. It trades about 0.07 of its potential returns per unit of risk. iShares Global Timber is currently generating about 0.06 per unit of risk. If you would invest 110,439 in Southern Copper on September 3, 2024 and sell it today you would earn a total of 99,751 from holding Southern Copper or generate 90.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Copper vs. iShares Global Timber
Performance |
| Timeline |
| Southern Copper |
| iShares Global Timber |
Southern Copper and IShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Copper and IShares Global
The main advantage of trading using opposite Southern Copper and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Copper position performs unexpectedly, IShares Global 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 IShares Global will offset losses from the drop in IShares Global's long position.| Southern Copper vs. Ross Stores | Southern Copper vs. Cognizant Technology Solutions | Southern Copper vs. Genworth Financial | Southern Copper vs. Southwest Airlines |
| IShares Global vs. iShares Trust | IShares Global vs. iShares Trust | IShares Global vs. iShares Trust | IShares Global vs. iShares Trust |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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