Correlation Between Western Copper and Atrium Mortgage
Can any of the company-specific risk be diversified away by investing in both Western Copper and Atrium Mortgage 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 Western Copper and Atrium Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Copper and and Atrium Mortgage Investment, you can compare the effects of market volatilities on Western Copper and Atrium Mortgage 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 Western Copper with a short position of Atrium Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and Atrium Mortgage.
Diversification Opportunities for Western Copper and Atrium Mortgage
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Western and Atrium is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and Atrium Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atrium Mortgage Inve and Western 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 Western Copper and are associated (or correlated) with Atrium Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atrium Mortgage Inve has no effect on the direction of Western Copper i.e., Western Copper and Atrium Mortgage go up and down completely randomly.
Pair Corralation between Western Copper and Atrium Mortgage
Assuming the 90 days trading horizon Western Copper and is expected to generate 2.97 times more return on investment than Atrium Mortgage. However, Western Copper is 2.97 times more volatile than Atrium Mortgage Investment. It trades about 0.09 of its potential returns per unit of risk. Atrium Mortgage Investment is currently generating about -0.13 per unit of risk. If you would invest 142.00 in Western Copper and on November 27, 2024 and sell it today you would earn a total of 6.00 from holding Western Copper and or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. Atrium Mortgage Investment
Performance |
| Timeline |
| Western Copper |
| Atrium Mortgage Inve |
Western Copper and Atrium Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and Atrium Mortgage
The main advantage of trading using opposite Western Copper and Atrium Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, Atrium Mortgage 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 Atrium Mortgage will offset losses from the drop in Atrium Mortgage's long position.The idea behind Western Copper and and Atrium Mortgage Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Atrium Mortgage vs. Timbercreek Financial Corp | Atrium Mortgage vs. Firm Capital Mortgage | Atrium Mortgage vs. MCAN Mortgage | Atrium Mortgage vs. First National Financial |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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