Correlation Between Western Copper and Next Hydrogen
Can any of the company-specific risk be diversified away by investing in both Western Copper and Next Hydrogen 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 Next Hydrogen 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 Next Hydrogen Solutions, you can compare the effects of market volatilities on Western Copper and Next Hydrogen 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 Next Hydrogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and Next Hydrogen.
Diversification Opportunities for Western Copper and Next Hydrogen
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Next is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and Next Hydrogen Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Hydrogen Solutions 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 Next Hydrogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Hydrogen Solutions has no effect on the direction of Western Copper i.e., Western Copper and Next Hydrogen go up and down completely randomly.
Pair Corralation between Western Copper and Next Hydrogen
Assuming the 90 days trading horizon Western Copper and is expected to generate 0.51 times more return on investment than Next Hydrogen. However, Western Copper and is 1.97 times less risky than Next Hydrogen. It trades about 0.0 of its potential returns per unit of risk. Next Hydrogen Solutions is currently generating about -0.01 per unit of risk. If you would invest 170.00 in Western Copper and on September 2, 2024 and sell it today you would lose (13.00) from holding Western Copper and or give up 7.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Western Copper and vs. Next Hydrogen Solutions
Performance |
| Timeline |
| Western Copper |
| Next Hydrogen Solutions |
Western Copper and Next Hydrogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and Next Hydrogen
The main advantage of trading using opposite Western Copper and Next Hydrogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, Next Hydrogen 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 Next Hydrogen will offset losses from the drop in Next Hydrogen's long position.| Western Copper vs. Kiplin Metals | Western Copper vs. Noram Lithium Corp | Western Copper vs. Minnova Corp |
| Next Hydrogen vs. Telus Corp | Next Hydrogen vs. Toronto Dominion Bank | Next Hydrogen vs. TC Energy Corp | Next Hydrogen vs. Manulife 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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