Correlation Between Western Copper and East Resources
Can any of the company-specific risk be diversified away by investing in both Western Copper and East Resources 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 East Resources 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 East Resources Acquisition, you can compare the effects of market volatilities on Western Copper and East Resources 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 East Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and East Resources.
Diversification Opportunities for Western Copper and East Resources
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and East is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and East Resources Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Resources Acqui 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 East Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Resources Acqui has no effect on the direction of Western Copper i.e., Western Copper and East Resources go up and down completely randomly.
Pair Corralation between Western Copper and East Resources
If you would invest 1,000.00 in East Resources Acquisition on September 13, 2024 and sell it today you would earn a total of 0.00 from holding East Resources Acquisition or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Western Copper and vs. East Resources Acquisition
Performance |
| Timeline |
| Western Copper |
| East Resources Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Western Copper and East Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and East Resources
The main advantage of trading using opposite Western Copper and East Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, East Resources 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 East Resources will offset losses from the drop in East Resources' long position.| Western Copper vs. MP Materials Corp | Western Copper vs. NioCorp Developments Ltd | Western Copper vs. Vale SA ADR | Western Copper vs. Vizsla Resources Corp |
| East Resources vs. Axalta Coating Systems | East Resources vs. The Mosaic | East Resources vs. Summit Environmental | East Resources vs. Ironveld Plc |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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