Correlation Between Western Copper and EMX Royalty
Can any of the company-specific risk be diversified away by investing in both Western Copper and EMX Royalty 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 EMX Royalty 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 EMX Royalty Corp, you can compare the effects of market volatilities on Western Copper and EMX Royalty 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 EMX Royalty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and EMX Royalty.
Diversification Opportunities for Western Copper and EMX Royalty
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Western and EMX is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and EMX Royalty Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMX Royalty 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 EMX Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMX Royalty Corp has no effect on the direction of Western Copper i.e., Western Copper and EMX Royalty go up and down completely randomly.
Pair Corralation between Western Copper and EMX Royalty
Considering the 90-day investment horizon Western Copper and is expected to under-perform the EMX Royalty. In addition to that, Western Copper is 1.45 times more volatile than EMX Royalty Corp. It trades about -0.08 of its total potential returns per unit of risk. EMX Royalty Corp is currently generating about -0.02 per unit of volatility. If you would invest 180.00 in EMX Royalty Corp on August 28, 2024 and sell it today you would lose (5.00) from holding EMX Royalty Corp or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. EMX Royalty Corp
Performance |
| Timeline |
| Western Copper |
| EMX Royalty Corp |
Western Copper and EMX Royalty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and EMX Royalty
The main advantage of trading using opposite Western Copper and EMX Royalty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, EMX Royalty 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 EMX Royalty will offset losses from the drop in EMX Royalty's long position.| Western Copper vs. Fury Gold Mines | Western Copper vs. EMX Royalty Corp | Western Copper vs. Nevada King Gold | Western Copper vs. Aftermath Silver |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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