Correlation Between Triad Group and Southern Copper
Can any of the company-specific risk be diversified away by investing in both Triad Group and Southern Copper 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 Triad Group and Southern Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triad Group PLC and Southern Copper Corp, you can compare the effects of market volatilities on Triad Group and Southern Copper 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 Triad Group with a short position of Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triad Group and Southern Copper.
Diversification Opportunities for Triad Group and Southern Copper
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Triad and Southern is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Triad Group PLC and Southern Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper Corp and Triad Group 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 Triad Group PLC are associated (or correlated) with Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper Corp has no effect on the direction of Triad Group i.e., Triad Group and Southern Copper go up and down completely randomly.
Pair Corralation between Triad Group and Southern Copper
Assuming the 90 days trading horizon Triad Group is expected to generate 1.19 times less return on investment than Southern Copper. But when comparing it to its historical volatility, Triad Group PLC is 3.02 times less risky than Southern Copper. It trades about 0.11 of its potential returns per unit of risk. Southern Copper Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,569 in Southern Copper Corp on September 3, 2024 and sell it today you would earn a total of 4,389 from holding Southern Copper Corp or generate 78.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Triad Group PLC vs. Southern Copper Corp
Performance |
| Timeline |
| Triad Group PLC |
| Southern Copper Corp |
Triad Group and Southern Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triad Group and Southern Copper
The main advantage of trading using opposite Triad Group and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triad Group position performs unexpectedly, Southern Copper 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 Southern Copper will offset losses from the drop in Southern Copper's long position.| Triad Group vs. Global Net Lease | Triad Group vs. Discover Financial Services | Triad Group vs. MyHealthChecked Plc | Triad Group vs. Inspiration Healthcare Group |
| Southern Copper vs. Finnair Oyj | Southern Copper vs. Air Products Chemicals | Southern Copper vs. Mindflair Plc | Southern Copper vs. Impax Asset Management |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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