Correlation Between World Copper and K2 Gold
Can any of the company-specific risk be diversified away by investing in both World Copper and K2 Gold 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 K2 Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Copper and K2 Gold, you can compare the effects of market volatilities on World Copper and K2 Gold 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 K2 Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Copper and K2 Gold.
Diversification Opportunities for World Copper and K2 Gold
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between World and KTO is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding World Copper and K2 Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K2 Gold 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 K2 Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K2 Gold has no effect on the direction of World Copper i.e., World Copper and K2 Gold go up and down completely randomly.
Pair Corralation between World Copper and K2 Gold
Assuming the 90 days horizon World Copper is expected to generate 1.32 times less return on investment than K2 Gold. In addition to that, World Copper is 1.04 times more volatile than K2 Gold. It trades about 0.04 of its total potential returns per unit of risk. K2 Gold is currently generating about 0.06 per unit of volatility. If you would invest 9.50 in K2 Gold on September 14, 2024 and sell it today you would earn a total of 4.50 from holding K2 Gold or generate 47.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
World Copper vs. K2 Gold
Performance |
| Timeline |
| World Copper |
| K2 Gold |
World Copper and K2 Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Copper and K2 Gold
The main advantage of trading using opposite World Copper and K2 Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Copper position performs unexpectedly, K2 Gold 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 K2 Gold will offset losses from the drop in K2 Gold'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 |
| K2 Gold vs. Arizona Sonoran Copper | K2 Gold vs. Marimaca Copper Corp | K2 Gold vs. World Copper | K2 Gold 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Global Correlations Find global opportunities by holding instruments from different markets |