Correlation Between Western Copper and British Amer
Can any of the company-specific risk be diversified away by investing in both Western Copper and British Amer 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 British Amer 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 biOasis Technologies, you can compare the effects of market volatilities on Western Copper and British Amer 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 British Amer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and British Amer.
Diversification Opportunities for Western Copper and British Amer
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Western and British is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and biOasis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on biOasis Technologies 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 British Amer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of biOasis Technologies has no effect on the direction of Western Copper i.e., Western Copper and British Amer go up and down completely randomly.
Pair Corralation between Western Copper and British Amer
Assuming the 90 days trading horizon Western Copper and is expected to under-perform the British Amer. But the stock apears to be less risky and, when comparing its historical volatility, Western Copper and is 100.06 times less risky than British Amer. The stock trades about -0.01 of its potential returns per unit of risk. The biOasis Technologies is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 123.00 in biOasis Technologies on August 26, 2024 and sell it today you would lose (122.50) from holding biOasis Technologies or give up 99.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. biOasis Technologies
Performance |
| Timeline |
| Western Copper |
| biOasis Technologies |
Western Copper and British Amer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and British Amer
The main advantage of trading using opposite Western Copper and British Amer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, British Amer 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 British Amer will offset losses from the drop in British Amer's long position.| Western Copper vs. First Majestic Silver | Western Copper vs. Ivanhoe Energy | Western Copper vs. Orezone Gold Corp | Western Copper vs. Faraday Copper Corp |
| British Amer vs. Western Copper and | British Amer vs. Arbor Metals Corp | British Amer vs. VersaBank | British Amer vs. Definity Financial 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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