Correlation Between World Copper and Copper Fox
Can any of the company-specific risk be diversified away by investing in both World Copper and Copper Fox 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 Copper Fox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Copper and Copper Fox Metals, you can compare the effects of market volatilities on World Copper and Copper Fox 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 Copper Fox. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Copper and Copper Fox.
Diversification Opportunities for World Copper and Copper Fox
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between World and Copper is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding World Copper and Copper Fox Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper Fox Metals 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 Copper Fox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper Fox Metals has no effect on the direction of World Copper i.e., World Copper and Copper Fox go up and down completely randomly.
Pair Corralation between World Copper and Copper Fox
Assuming the 90 days horizon World Copper is expected to generate 5.58 times less return on investment than Copper Fox. But when comparing it to its historical volatility, World Copper is 1.05 times less risky than Copper Fox. It trades about 0.01 of its potential returns per unit of risk. Copper Fox Metals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Copper Fox Metals on September 5, 2024 and sell it today you would earn a total of 8.00 from holding Copper Fox Metals or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
World Copper vs. Copper Fox Metals
Performance |
| Timeline |
| World Copper |
| Copper Fox Metals |
World Copper and Copper Fox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Copper and Copper Fox
The main advantage of trading using opposite World Copper and Copper Fox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Copper position performs unexpectedly, Copper Fox 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 Fox will offset losses from the drop in Copper Fox's long position.| World Copper vs. Copper Fox Metals | World Copper vs. Imperial Metals | World Copper vs. Bell Copper | World Copper vs. Dor Copper Mining |
| Copper Fox vs. Copper Mountain Mining | Copper Fox vs. Copper Fox Metals | Copper Fox vs. Highland Copper | Copper Fox vs. Copperbank Resources Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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