Correlation Between Western Copper and MFA Financial
Can any of the company-specific risk be diversified away by investing in both Western Copper and MFA Financial 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 MFA Financial 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 MFA Financial SR, you can compare the effects of market volatilities on Western Copper and MFA Financial 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 MFA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and MFA Financial.
Diversification Opportunities for Western Copper and MFA Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and MFA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and MFA Financial SR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFA Financial SR 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 MFA Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFA Financial SR has no effect on the direction of Western Copper i.e., Western Copper and MFA Financial go up and down completely randomly.
Pair Corralation between Western Copper and MFA Financial
If you would invest (100.00) in MFA Financial SR on September 19, 2024 and sell it today you would earn a total of 100.00 from holding MFA Financial SR or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Western Copper and vs. MFA Financial SR
Performance |
| Timeline |
| Western Copper |
| MFA Financial SR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Western Copper and MFA Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and MFA Financial
The main advantage of trading using opposite Western Copper and MFA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, MFA Financial 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 MFA Financial will offset losses from the drop in MFA Financial's long position.| Western Copper vs. Vale SA ADR | Western Copper vs. Electra Battery Materials | Western Copper vs. Foremost Lithium Resource | Western Copper vs. Brazil Potash Corp |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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