Correlation Between Western Copper and Northern Dynasty
Can any of the company-specific risk be diversified away by investing in both Western Copper and Northern Dynasty 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 Northern Dynasty 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 Northern Dynasty Minerals, you can compare the effects of market volatilities on Western Copper and Northern Dynasty 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 Northern Dynasty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and Northern Dynasty.
Diversification Opportunities for Western Copper and Northern Dynasty
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Northern is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and Northern Dynasty Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Dynasty Minerals 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 Northern Dynasty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Dynasty Minerals has no effect on the direction of Western Copper i.e., Western Copper and Northern Dynasty go up and down completely randomly.
Pair Corralation between Western Copper and Northern Dynasty
Assuming the 90 days trading horizon Western Copper and is expected to under-perform the Northern Dynasty. In addition to that, Western Copper is 1.03 times more volatile than Northern Dynasty Minerals. It trades about 0.0 of its total potential returns per unit of risk. Northern Dynasty Minerals is currently generating about 0.33 per unit of volatility. If you would invest 60.00 in Northern Dynasty Minerals on September 13, 2024 and sell it today you would earn a total of 16.00 from holding Northern Dynasty Minerals or generate 26.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Western Copper and vs. Northern Dynasty Minerals
Performance |
| Timeline |
| Western Copper |
| Northern Dynasty Minerals |
Western Copper and Northern Dynasty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and Northern Dynasty
The main advantage of trading using opposite Western Copper and Northern Dynasty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, Northern Dynasty 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 Northern Dynasty will offset losses from the drop in Northern Dynasty's long position.| Western Copper vs. Foraco International SA | Western Copper vs. Geodrill Limited | Western Copper vs. Major Drilling Group | Western Copper vs. Bri Chem Corp |
| Northern Dynasty vs. Taseko Mines | Northern Dynasty vs. New Gold | Northern Dynasty vs. Western Copper and | Northern Dynasty vs. NovaGold Resources |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |