Correlation Between Trencor and Copper 360
Can any of the company-specific risk be diversified away by investing in both Trencor and Copper 360 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 Trencor and Copper 360 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trencor and Copper 360, you can compare the effects of market volatilities on Trencor and Copper 360 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 Trencor with a short position of Copper 360. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trencor and Copper 360.
Diversification Opportunities for Trencor and Copper 360
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Trencor and Copper is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Trencor and Copper 360 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper 360 and Trencor 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 Trencor are associated (or correlated) with Copper 360. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper 360 has no effect on the direction of Trencor i.e., Trencor and Copper 360 go up and down completely randomly.
Pair Corralation between Trencor and Copper 360
Assuming the 90 days trading horizon Trencor is expected to under-perform the Copper 360. But the stock apears to be less risky and, when comparing its historical volatility, Trencor is 1.49 times less risky than Copper 360. The stock trades about -0.02 of its potential returns per unit of risk. The Copper 360 is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 40,000 in Copper 360 on December 4, 2024 and sell it today you would lose (20,000) from holding Copper 360 or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.52% |
| Values | Daily Returns |
Trencor vs. Copper 360
Performance |
| Timeline |
| Trencor |
| Copper 360 |
Trencor and Copper 360 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trencor and Copper 360
The main advantage of trading using opposite Trencor and Copper 360 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trencor position performs unexpectedly, Copper 360 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 360 will offset losses from the drop in Copper 360's long position.The idea behind Trencor and Copper 360 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Copper 360 vs. RCL Foods | Copper 360 vs. Frontier Transport Holdings | Copper 360 vs. Capitec Bank Holdings | Copper 360 vs. HomeChoice Investments |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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