Correlation Between Western Copper and BW LPG
Can any of the company-specific risk be diversified away by investing in both Western Copper and BW LPG 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 BW LPG 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 BW LPG Limited, you can compare the effects of market volatilities on Western Copper and BW LPG 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 BW LPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and BW LPG.
Diversification Opportunities for Western Copper and BW LPG
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and BWLP is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and BW LPG Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW LPG Limited 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 BW LPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW LPG Limited has no effect on the direction of Western Copper i.e., Western Copper and BW LPG go up and down completely randomly.
Pair Corralation between Western Copper and BW LPG
Considering the 90-day investment horizon Western Copper and is expected to generate 1.04 times more return on investment than BW LPG. However, Western Copper is 1.04 times more volatile than BW LPG Limited. It trades about 0.0 of its potential returns per unit of risk. BW LPG Limited is currently generating about 0.0 per unit of risk. If you would invest 123.00 in Western Copper and on September 14, 2024 and sell it today you would lose (18.00) from holding Western Copper and or give up 14.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. BW LPG Limited
Performance |
| Timeline |
| Western Copper |
| BW LPG Limited |
Western Copper and BW LPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and BW LPG
The main advantage of trading using opposite Western Copper and BW LPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, BW LPG 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 BW LPG will offset losses from the drop in BW LPG's long position.| Western Copper vs. MP Materials Corp | Western Copper vs. Vale SA ADR | Western Copper vs. Vizsla Resources Corp | Western Copper vs. Electra Battery Materials |
| BW LPG vs. Arm Holdings plc | BW LPG vs. Valens | BW LPG vs. Elmos Semiconductor SE | BW LPG vs. Western Copper and |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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