Correlation Between Western Copper and Trigon Metals
Can any of the company-specific risk be diversified away by investing in both Western Copper and Trigon Metals 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 Trigon Metals 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 Trigon Metals, you can compare the effects of market volatilities on Western Copper and Trigon Metals 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 Trigon Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and Trigon Metals.
Diversification Opportunities for Western Copper and Trigon Metals
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Trigon is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and Trigon Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trigon Metals 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 Trigon Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trigon Metals has no effect on the direction of Western Copper i.e., Western Copper and Trigon Metals go up and down completely randomly.
Pair Corralation between Western Copper and Trigon Metals
Assuming the 90 days trading horizon Western Copper and is expected to generate 2.29 times more return on investment than Trigon Metals. However, Western Copper is 2.29 times more volatile than Trigon Metals. It trades about 0.03 of its potential returns per unit of risk. Trigon Metals is currently generating about -0.3 per unit of risk. If you would invest 159.00 in Western Copper and on August 27, 2024 and sell it today you would earn a total of 1.00 from holding Western Copper and or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. Trigon Metals
Performance |
| Timeline |
| Western Copper |
| Trigon Metals |
Western Copper and Trigon Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and Trigon Metals
The main advantage of trading using opposite Western Copper and Trigon Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, Trigon Metals 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 Trigon Metals will offset losses from the drop in Trigon Metals' 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 |
| Trigon Metals vs. iMetal Resources | Trigon Metals vs. Mountain Boy Minerals | Trigon Metals vs. Stroud Resources | Trigon Metals vs. Golden Goliath 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 CEOs Directory module to screen CEOs from public companies around the world.
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