Correlation Between Western Copper and Tyson Foods
Can any of the company-specific risk be diversified away by investing in both Western Copper and Tyson Foods 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 Tyson Foods 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 Tyson Foods, you can compare the effects of market volatilities on Western Copper and Tyson Foods 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 Tyson Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and Tyson Foods.
Diversification Opportunities for Western Copper and Tyson Foods
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Tyson is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and Tyson Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tyson Foods 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 Tyson Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tyson Foods has no effect on the direction of Western Copper i.e., Western Copper and Tyson Foods go up and down completely randomly.
Pair Corralation between Western Copper and Tyson Foods
Considering the 90-day investment horizon Western Copper and is expected to under-perform the Tyson Foods. In addition to that, Western Copper is 3.94 times more volatile than Tyson Foods. It trades about -0.01 of its total potential returns per unit of risk. Tyson Foods is currently generating about 0.02 per unit of volatility. If you would invest 6,217 in Tyson Foods on September 13, 2024 and sell it today you would earn a total of 23.00 from holding Tyson Foods or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. Tyson Foods
Performance |
| Timeline |
| Western Copper |
| Tyson Foods |
Western Copper and Tyson Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and Tyson Foods
The main advantage of trading using opposite Western Copper and Tyson Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, Tyson Foods 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 Tyson Foods will offset losses from the drop in Tyson Foods' 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 |
| Tyson Foods vs. General Mills | Tyson Foods vs. Campbell Soup | Tyson Foods vs. ConAgra Foods | Tyson Foods vs. Hormel Foods |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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