Correlation Between Western Copper and Global Battery
Can any of the company-specific risk be diversified away by investing in both Western Copper and Global Battery 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 Global Battery 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 Global Battery Metals, you can compare the effects of market volatilities on Western Copper and Global Battery 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 Global Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and Global Battery.
Diversification Opportunities for Western Copper and Global Battery
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Global is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and Global Battery Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Battery Metals 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 Global Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Battery Metals has no effect on the direction of Western Copper i.e., Western Copper and Global Battery go up and down completely randomly.
Pair Corralation between Western Copper and Global Battery
Considering the 90-day investment horizon Western Copper and is expected to under-perform the Global Battery. But the stock apears to be less risky and, when comparing its historical volatility, Western Copper and is 3.16 times less risky than Global Battery. The stock trades about -0.02 of its potential returns per unit of risk. The Global Battery Metals is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 9.93 in Global Battery Metals on September 3, 2024 and sell it today you would lose (8.41) from holding Global Battery Metals or give up 84.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Western Copper and vs. Global Battery Metals
Performance |
| Timeline |
| Western Copper |
| Global Battery Metals |
Western Copper and Global Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and Global Battery
The main advantage of trading using opposite Western Copper and Global Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, Global Battery 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 Global Battery will offset losses from the drop in Global Battery'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 |
| Global Battery vs. Altair International Corp | Global Battery vs. Lake Resources NL | Global Battery vs. Jourdan Resources | Global Battery vs. Lomiko Metals |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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