Correlation Between Western Copper and Altair International
Can any of the company-specific risk be diversified away by investing in both Western Copper and Altair International 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 Altair International 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 Altair International Corp, you can compare the effects of market volatilities on Western Copper and Altair International 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 Altair International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and Altair International.
Diversification Opportunities for Western Copper and Altair International
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Western and Altair is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and Altair International Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair International Corp 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 Altair International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altair International Corp has no effect on the direction of Western Copper i.e., Western Copper and Altair International go up and down completely randomly.
Pair Corralation between Western Copper and Altair International
Considering the 90-day investment horizon Western Copper is expected to generate 1.19 times less return on investment than Altair International. But when comparing it to its historical volatility, Western Copper and is 3.82 times less risky than Altair International. It trades about 0.07 of its potential returns per unit of risk. Altair International Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4.50 in Altair International Corp on September 1, 2024 and sell it today you would lose (0.49) from holding Altair International Corp or give up 10.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Western Copper and vs. Altair International Corp
Performance |
| Timeline |
| Western Copper |
| Altair International Corp |
Western Copper and Altair International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and Altair International
The main advantage of trading using opposite Western Copper and Altair International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, Altair International 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 Altair International will offset losses from the drop in Altair International's long position.| Western Copper vs. NioCorp Developments Ltd | Western Copper vs. Teck Resources Ltd | Western Copper vs. Sigma Lithium Resources | Western Copper vs. MP Materials Corp |
| Altair International vs. ATT Inc | Altair International vs. Merck Company | Altair International vs. Walt Disney | Altair International vs. Caterpillar |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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