Correlation Between WA1 Resources and Cooper Metals
Can any of the company-specific risk be diversified away by investing in both WA1 Resources 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 WA1 Resources and Cooper Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WA1 Resources and Cooper Metals, you can compare the effects of market volatilities on WA1 Resources 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 WA1 Resources with a short position of Cooper Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of WA1 Resources and Cooper Metals.
Diversification Opportunities for WA1 Resources and Cooper Metals
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WA1 and Cooper is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding WA1 Resources and Cooper Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Metals and WA1 Resources 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 WA1 Resources 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 WA1 Resources i.e., WA1 Resources and Cooper Metals go up and down completely randomly.
Pair Corralation between WA1 Resources and Cooper Metals
Assuming the 90 days trading horizon WA1 Resources is expected to generate 0.6 times more return on investment than Cooper Metals. However, WA1 Resources is 1.66 times less risky than Cooper Metals. It trades about 0.09 of its potential returns per unit of risk. Cooper Metals is currently generating about 0.0 per unit of risk. If you would invest 557.00 in WA1 Resources on August 26, 2024 and sell it today you would earn a total of 1,024 from holding WA1 Resources or generate 183.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.7% |
| Values | Daily Returns |
WA1 Resources vs. Cooper Metals
Performance |
| Timeline |
| WA1 Resources |
| Cooper Metals |
WA1 Resources and Cooper Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WA1 Resources and Cooper Metals
The main advantage of trading using opposite WA1 Resources and Cooper Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WA1 Resources 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.| WA1 Resources vs. Northern Star Resources | WA1 Resources vs. Evolution Mining | WA1 Resources vs. Bluescope Steel | WA1 Resources vs. Sandfire Resources NL |
| Cooper Metals vs. Stelar Metals | Cooper Metals vs. DY6 Metals | Cooper Metals vs. Dicker Data | Cooper Metals vs. Strickland Metals |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Commodity Directory Find actively traded commodities issued by global exchanges |