Correlation Between Surge Copper and Anglo American
Can any of the company-specific risk be diversified away by investing in both Surge Copper and Anglo American 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 Surge Copper and Anglo American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Surge Copper Corp and Anglo American PLC, you can compare the effects of market volatilities on Surge Copper and Anglo American 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 Surge Copper with a short position of Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surge Copper and Anglo American.
Diversification Opportunities for Surge Copper and Anglo American
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Surge and Anglo is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Surge Copper Corp and Anglo American PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo American PLC and Surge 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 Surge Copper Corp are associated (or correlated) with Anglo American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo American PLC has no effect on the direction of Surge Copper i.e., Surge Copper and Anglo American go up and down completely randomly.
Pair Corralation between Surge Copper and Anglo American
Assuming the 90 days horizon Surge Copper Corp is expected to generate 2.16 times more return on investment than Anglo American. However, Surge Copper is 2.16 times more volatile than Anglo American PLC. It trades about 0.02 of its potential returns per unit of risk. Anglo American PLC is currently generating about 0.0 per unit of risk. If you would invest 9.39 in Surge Copper Corp on August 29, 2024 and sell it today you would lose (2.51) from holding Surge Copper Corp or give up 26.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Surge Copper Corp vs. Anglo American PLC
Performance |
| Timeline |
| Surge Copper Corp |
| Anglo American PLC |
Surge Copper and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Surge Copper and Anglo American
The main advantage of trading using opposite Surge Copper and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surge Copper position performs unexpectedly, Anglo American 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 Anglo American will offset losses from the drop in Anglo American's long position.| Surge Copper vs. Rockridge Resources | Surge Copper vs. Ameriwest Lithium | Surge Copper vs. Osisko Metals Incorporated | Surge Copper vs. Volt Lithium Corp |
| Anglo American vs. BHP Group Limited | Anglo American vs. Avarone Metals | Anglo American vs. Huntsman Exploration | Anglo American vs. Aurelia Metals Limited |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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