Correlation Between Western Copper and Atlas Lithium
Can any of the company-specific risk be diversified away by investing in both Western Copper and Atlas Lithium 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 Atlas Lithium 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 Atlas Lithium, you can compare the effects of market volatilities on Western Copper and Atlas Lithium 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 Atlas Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and Atlas Lithium.
Diversification Opportunities for Western Copper and Atlas Lithium
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Atlas is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and Atlas Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Lithium 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 Atlas Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Lithium has no effect on the direction of Western Copper i.e., Western Copper and Atlas Lithium go up and down completely randomly.
Pair Corralation between Western Copper and Atlas Lithium
Considering the 90-day investment horizon Western Copper and is expected to generate 0.89 times more return on investment than Atlas Lithium. However, Western Copper and is 1.13 times less risky than Atlas Lithium. It trades about 0.0 of its potential returns per unit of risk. Atlas Lithium is currently generating about -0.37 per unit of risk. If you would invest 115.00 in Western Copper and on August 28, 2024 and sell it today you would lose (2.00) from holding Western Copper and or give up 1.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. Atlas Lithium
Performance |
| Timeline |
| Western Copper |
| Atlas Lithium |
Western Copper and Atlas Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and Atlas Lithium
The main advantage of trading using opposite Western Copper and Atlas Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, Atlas Lithium 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 Atlas Lithium will offset losses from the drop in Atlas Lithium's long position.| Western Copper vs. Vale SA ADR | Western Copper vs. Teck Resources Ltd | Western Copper vs. BHP Group Limited | Western Copper vs. Glencore PLC ADR |
| Atlas Lithium vs. SilverCrest Metals | Atlas Lithium vs. New Pacific Metals | Atlas Lithium vs. Endeavour Silver Corp | Atlas Lithium vs. McEwen Mining |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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