Correlation Between Western Copper and Materion
Can any of the company-specific risk be diversified away by investing in both Western Copper and Materion 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 Materion 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 Materion, you can compare the effects of market volatilities on Western Copper and Materion 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 Materion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and Materion.
Diversification Opportunities for Western Copper and Materion
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Western and Materion is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and Materion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materion 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 Materion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materion has no effect on the direction of Western Copper i.e., Western Copper and Materion go up and down completely randomly.
Pair Corralation between Western Copper and Materion
Considering the 90-day investment horizon Western Copper and is expected to under-perform the Materion. In addition to that, Western Copper is 1.19 times more volatile than Materion. It trades about -0.01 of its total potential returns per unit of risk. Materion is currently generating about 0.04 per unit of volatility. If you would invest 8,118 in Materion on August 24, 2024 and sell it today you would earn a total of 3,558 from holding Materion or generate 43.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. Materion
Performance |
| Timeline |
| Western Copper |
| Materion |
Western Copper and Materion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and Materion
The main advantage of trading using opposite Western Copper and Materion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, Materion 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 Materion will offset losses from the drop in Materion'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 |
| Materion vs. Skeena Resources | Materion vs. Compass Minerals International | Materion vs. IperionX Limited American | Materion vs. EMX Royalty Corp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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