Correlation Between Silver Spruce and Copper Lake
Can any of the company-specific risk be diversified away by investing in both Silver Spruce and Copper Lake 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 Silver Spruce and Copper Lake into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silver Spruce Resources and Copper Lake Resources, you can compare the effects of market volatilities on Silver Spruce and Copper Lake 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 Silver Spruce with a short position of Copper Lake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silver Spruce and Copper Lake.
Diversification Opportunities for Silver Spruce and Copper Lake
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Silver and Copper is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Silver Spruce Resources and Copper Lake Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper Lake Resources and Silver Spruce 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 Silver Spruce Resources are associated (or correlated) with Copper Lake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper Lake Resources has no effect on the direction of Silver Spruce i.e., Silver Spruce and Copper Lake go up and down completely randomly.
Pair Corralation between Silver Spruce and Copper Lake
Assuming the 90 days horizon Silver Spruce is expected to generate 14.31 times less return on investment than Copper Lake. But when comparing it to its historical volatility, Silver Spruce Resources is 5.94 times less risky than Copper Lake. It trades about 0.07 of its potential returns per unit of risk. Copper Lake Resources is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 0.63 in Copper Lake Resources on October 28, 2024 and sell it today you would earn a total of 0.07 from holding Copper Lake Resources or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silver Spruce Resources vs. Copper Lake Resources
Performance |
| Timeline |
| Silver Spruce Resources |
| Copper Lake Resources |
Silver Spruce and Copper Lake Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silver Spruce and Copper Lake
The main advantage of trading using opposite Silver Spruce and Copper Lake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silver Spruce position performs unexpectedly, Copper Lake 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 Copper Lake will offset losses from the drop in Copper Lake's long position.| Silver Spruce vs. Arctic Star Exploration | Silver Spruce vs. American Clean Resources | Silver Spruce vs. Arras Minerals Corp | Silver Spruce vs. American Creek Resources |
| Copper Lake vs. EMX Royalty Corp | Copper Lake vs. BHP Group Limited | Copper Lake vs. Vale SA ADR | Copper Lake vs. Rio Tinto ADR |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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