Correlation Between Western Copper and Nevada King
Can any of the company-specific risk be diversified away by investing in both Western Copper and Nevada King 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 Nevada King 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 Nevada King Gold, you can compare the effects of market volatilities on Western Copper and Nevada King 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 Nevada King. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and Nevada King.
Diversification Opportunities for Western Copper and Nevada King
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Western and Nevada is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and Nevada King Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nevada King Gold 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 Nevada King. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nevada King Gold has no effect on the direction of Western Copper i.e., Western Copper and Nevada King go up and down completely randomly.
Pair Corralation between Western Copper and Nevada King
Considering the 90-day investment horizon Western Copper and is expected to generate 0.52 times more return on investment than Nevada King. However, Western Copper and is 1.93 times less risky than Nevada King. It trades about -0.08 of its potential returns per unit of risk. Nevada King Gold is currently generating about -0.06 per unit of risk. If you would invest 127.00 in Western Copper and on August 28, 2024 and sell it today you would lose (14.00) from holding Western Copper and or give up 11.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. Nevada King Gold
Performance |
| Timeline |
| Western Copper |
| Nevada King Gold |
Western Copper and Nevada King Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and Nevada King
The main advantage of trading using opposite Western Copper and Nevada King positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, Nevada King 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 Nevada King will offset losses from the drop in Nevada King'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 |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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