Correlation Between Copper Lake and Durango Resources
Can any of the company-specific risk be diversified away by investing in both Copper Lake and Durango Resources 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 Copper Lake and Durango Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Copper Lake Resources and Durango Resources, you can compare the effects of market volatilities on Copper Lake and Durango Resources 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 Copper Lake with a short position of Durango Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copper Lake and Durango Resources.
Diversification Opportunities for Copper Lake and Durango Resources
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Copper and Durango is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Copper Lake Resources and Durango Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Durango Resources and Copper Lake 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 Copper Lake Resources are associated (or correlated) with Durango Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Durango Resources has no effect on the direction of Copper Lake i.e., Copper Lake and Durango Resources go up and down completely randomly.
Pair Corralation between Copper Lake and Durango Resources
Assuming the 90 days horizon Copper Lake Resources is expected to generate 6.86 times more return on investment than Durango Resources. However, Copper Lake is 6.86 times more volatile than Durango Resources. It trades about 0.19 of its potential returns per unit of risk. Durango Resources is currently generating about 0.17 per unit of risk. If you would invest 0.75 in Copper Lake Resources on October 18, 2024 and sell it today you would lose (0.05) from holding Copper Lake Resources or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Copper Lake Resources vs. Durango Resources
Performance |
| Timeline |
| Copper Lake Resources |
| Durango Resources |
Copper Lake and Durango Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copper Lake and Durango Resources
The main advantage of trading using opposite Copper Lake and Durango Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copper Lake position performs unexpectedly, Durango Resources 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 Durango Resources will offset losses from the drop in Durango Resources' long position.| Copper Lake vs. Durango Resources | Copper Lake vs. Avarone Metals | Copper Lake vs. Pampa Metals | Copper Lake vs. Sun Summit Minerals |
| Durango Resources vs. Avarone Metals | Durango Resources vs. Amarc Resources | Durango Resources vs. Pampa Metals | Durango Resources vs. Sun Summit Minerals |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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