Correlation Between TasFoods and Cooper Metals
Can any of the company-specific risk be diversified away by investing in both TasFoods 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 TasFoods and Cooper Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TasFoods and Cooper Metals, you can compare the effects of market volatilities on TasFoods 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 TasFoods with a short position of Cooper Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of TasFoods and Cooper Metals.
Diversification Opportunities for TasFoods and Cooper Metals
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between TasFoods and Cooper is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding TasFoods and Cooper Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Metals and TasFoods 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 TasFoods 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 TasFoods i.e., TasFoods and Cooper Metals go up and down completely randomly.
Pair Corralation between TasFoods and Cooper Metals
Assuming the 90 days trading horizon TasFoods is expected to generate 0.75 times more return on investment than Cooper Metals. However, TasFoods is 1.34 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 0.0 per unit of risk. If you would invest 2.40 in TasFoods on September 12, 2024 and sell it today you would lose (1.00) from holding TasFoods or give up 41.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TasFoods vs. Cooper Metals
Performance |
| Timeline |
| TasFoods |
| Cooper Metals |
TasFoods and Cooper Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TasFoods and Cooper Metals
The main advantage of trading using opposite TasFoods and Cooper Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TasFoods 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.| TasFoods vs. Tlou Energy | TasFoods vs. Southern Cross Gold | TasFoods vs. Minbos Resources | TasFoods vs. Elevate Uranium |
| Cooper Metals vs. Aristocrat Leisure | Cooper Metals vs. Dicker Data | Cooper Metals vs. Champion Iron | Cooper Metals vs. Data3 |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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