Correlation Between World Copper and Dore Copper
Can any of the company-specific risk be diversified away by investing in both World Copper and Dore 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 World Copper and Dore Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Copper and Dore Copper Mining, you can compare the effects of market volatilities on World Copper and Dore 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 World Copper with a short position of Dore Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Copper and Dore Copper.
Diversification Opportunities for World Copper and Dore Copper
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between World and Dore is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding World Copper and Dore Copper Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dore Copper Mining and World Copper 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 World Copper are associated (or correlated) with Dore Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dore Copper Mining has no effect on the direction of World Copper i.e., World Copper and Dore Copper go up and down completely randomly.
Pair Corralation between World Copper and Dore Copper
Assuming the 90 days horizon World Copper is expected to generate 2.23 times more return on investment than Dore Copper. However, World Copper is 2.23 times more volatile than Dore Copper Mining. It trades about -0.06 of its potential returns per unit of risk. Dore Copper Mining is currently generating about -0.3 per unit of risk. If you would invest 8.50 in World Copper on September 13, 2024 and sell it today you would lose (1.00) from holding World Copper or give up 11.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
World Copper vs. Dore Copper Mining
Performance |
| Timeline |
| World Copper |
| Dore Copper Mining |
World Copper and Dore Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Copper and Dore Copper
The main advantage of trading using opposite World Copper and Dore Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Copper position performs unexpectedly, Dore 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 Dore Copper will offset losses from the drop in Dore Copper's long position.| World Copper vs. Arizona Sonoran Copper | World Copper vs. Marimaca Copper Corp | World Copper vs. QC Copper and | World Copper vs. Dore Copper Mining |
| Dore Copper vs. Arizona Sonoran Copper | Dore Copper vs. Marimaca Copper Corp | Dore Copper vs. World Copper | Dore Copper vs. QC Copper and |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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