Correlation Between Western Copper and CNJ Capital
Can any of the company-specific risk be diversified away by investing in both Western Copper and CNJ Capital 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 CNJ Capital 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 CNJ Capital Investments, you can compare the effects of market volatilities on Western Copper and CNJ Capital 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 CNJ Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and CNJ Capital.
Diversification Opportunities for Western Copper and CNJ Capital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and CNJ is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and CNJ Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNJ Capital Investments 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 CNJ Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNJ Capital Investments has no effect on the direction of Western Copper i.e., Western Copper and CNJ Capital go up and down completely randomly.
Pair Corralation between Western Copper and CNJ Capital
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 | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. CNJ Capital Investments
Performance |
| Timeline |
| Western Copper |
| CNJ Capital Investments |
Western Copper and CNJ Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and CNJ Capital
The main advantage of trading using opposite Western Copper and CNJ Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, CNJ Capital 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 CNJ Capital will offset losses from the drop in CNJ Capital's long position.The idea behind Western Copper and and CNJ Capital Investments 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.| CNJ Capital vs. Magna Mining | CNJ Capital vs. Doman Building Materials | CNJ Capital vs. Verizon Communications CDR | CNJ Capital vs. Metalero Mining 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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