Correlation Between Copper Lake and EMX Royalty
Can any of the company-specific risk be diversified away by investing in both Copper Lake and EMX Royalty 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 EMX Royalty 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 EMX Royalty Corp, you can compare the effects of market volatilities on Copper Lake and EMX Royalty 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 EMX Royalty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copper Lake and EMX Royalty.
Diversification Opportunities for Copper Lake and EMX Royalty
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Copper and EMX is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Copper Lake Resources and EMX Royalty Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMX Royalty Corp 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 EMX Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMX Royalty Corp has no effect on the direction of Copper Lake i.e., Copper Lake and EMX Royalty go up and down completely randomly.
Pair Corralation between Copper Lake and EMX Royalty
Assuming the 90 days horizon Copper Lake Resources is expected to generate 24.56 times more return on investment than EMX Royalty. However, Copper Lake is 24.56 times more volatile than EMX Royalty Corp. It trades about 0.05 of its potential returns per unit of risk. EMX Royalty Corp is currently generating about 0.06 per unit of risk. If you would invest 0.63 in Copper Lake Resources on September 27, 2024 and sell it today you would lose (0.48) from holding Copper Lake Resources or give up 76.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copper Lake Resources vs. EMX Royalty Corp
Performance |
| Timeline |
| Copper Lake Resources |
| EMX Royalty Corp |
Copper Lake and EMX Royalty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copper Lake and EMX Royalty
The main advantage of trading using opposite Copper Lake and EMX Royalty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copper Lake position performs unexpectedly, EMX Royalty 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 EMX Royalty will offset losses from the drop in EMX Royalty's long position.| Copper Lake vs. EMX Royalty Corp | Copper Lake vs. BHP Group Limited | Copper Lake vs. Vale SA ADR | Copper Lake vs. Rio Tinto ADR |
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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