Correlation Between Stelar Metals and Cooper Metals
Can any of the company-specific risk be diversified away by investing in both Stelar Metals and Cooper Metals 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 Stelar Metals and Cooper Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stelar Metals and Cooper Metals, you can compare the effects of market volatilities on Stelar Metals and Cooper Metals 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 Stelar Metals with a short position of Cooper Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stelar Metals and Cooper Metals.
Diversification Opportunities for Stelar Metals and Cooper Metals
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stelar and Cooper is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Stelar Metals and Cooper Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Metals and Stelar Metals 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 Stelar Metals are associated (or correlated) with Cooper Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cooper Metals has no effect on the direction of Stelar Metals i.e., Stelar Metals and Cooper Metals go up and down completely randomly.
Pair Corralation between Stelar Metals and Cooper Metals
Assuming the 90 days trading horizon Stelar Metals is expected to generate 0.7 times more return on investment than Cooper Metals. However, Stelar Metals is 1.44 times less risky than Cooper Metals. It trades about 0.0 of its potential returns per unit of risk. Cooper Metals is currently generating about -0.01 per unit of risk. If you would invest 14.00 in Stelar Metals on August 30, 2024 and sell it today you would lose (7.50) from holding Stelar Metals or give up 53.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stelar Metals vs. Cooper Metals
Performance |
| Timeline |
| Stelar Metals |
| Cooper Metals |
Stelar Metals and Cooper Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stelar Metals and Cooper Metals
The main advantage of trading using opposite Stelar Metals and Cooper Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar Metals position performs unexpectedly, Cooper Metals 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 Cooper Metals will offset losses from the drop in Cooper Metals' long position.| Stelar Metals vs. Northern Star Resources | Stelar Metals vs. Evolution Mining | Stelar Metals vs. Bluescope Steel | Stelar Metals vs. Sandfire Resources NL |
| Cooper Metals vs. Apiam Animal Health | Cooper Metals vs. Tombador Iron | Cooper Metals vs. Retail Food Group | Cooper Metals vs. Bisalloy Steel 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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