Correlation Between World Copper and Torex Gold
Can any of the company-specific risk be diversified away by investing in both World Copper and Torex 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 Torex 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 Torex Gold Resources, you can compare the effects of market volatilities on World Copper and Torex 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 Torex Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Copper and Torex Gold.
Diversification Opportunities for World Copper and Torex Gold
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between World and Torex is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding World Copper and Torex Gold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Torex Gold Resources 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 Torex Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Torex Gold Resources has no effect on the direction of World Copper i.e., World Copper and Torex Gold go up and down completely randomly.
Pair Corralation between World Copper and Torex Gold
Assuming the 90 days horizon World Copper is expected to generate 4.3 times less return on investment than Torex Gold. In addition to that, World Copper is 2.7 times more volatile than Torex Gold Resources. It trades about 0.0 of its total potential returns per unit of risk. Torex Gold Resources is currently generating about 0.05 per unit of volatility. If you would invest 2,031 in Torex Gold Resources on December 6, 2024 and sell it today you would earn a total of 1,157 from holding Torex Gold Resources or generate 56.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
World Copper vs. Torex Gold Resources
Performance |
| Timeline |
| World Copper |
| Torex Gold Resources |
World Copper and Torex Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Copper and Torex Gold
The main advantage of trading using opposite World Copper and Torex Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Copper position performs unexpectedly, Torex 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 Torex Gold will offset losses from the drop in Torex Gold's long position.| World Copper vs. Bell Copper Corp | World Copper vs. Northwest Copper Corp | World Copper vs. Wealth Minerals |
| Torex Gold vs. OceanaGold | Torex Gold vs. Wesdome Gold Mines | Torex Gold vs. Centerra Gold | Torex Gold vs. Alamos Gold |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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