Correlation Between Copper Lake and Global Battery
Can any of the company-specific risk be diversified away by investing in both Copper Lake 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 Copper Lake and Global Battery 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 Global Battery Metals, you can compare the effects of market volatilities on Copper Lake 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 Copper Lake with a short position of Global Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copper Lake and Global Battery.
Diversification Opportunities for Copper Lake and Global Battery
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Copper and Global is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Copper Lake Resources 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 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 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 Copper Lake i.e., Copper Lake and Global Battery go up and down completely randomly.
Pair Corralation between Copper Lake and Global Battery
Assuming the 90 days horizon Copper Lake Resources is expected to generate 2.52 times more return on investment than Global Battery. However, Copper Lake is 2.52 times more volatile than Global Battery Metals. It trades about 0.06 of its potential returns per unit of risk. Global Battery Metals is currently generating about 0.07 per unit of risk. If you would invest 0.70 in Copper Lake Resources on September 27, 2024 and sell it today you would lose (0.55) from holding Copper Lake Resources or give up 78.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Copper Lake Resources vs. Global Battery Metals
Performance |
| Timeline |
| Copper Lake Resources |
| Global Battery Metals |
Copper Lake and Global Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copper Lake and Global Battery
The main advantage of trading using opposite Copper Lake and Global Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copper Lake 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.| Copper Lake vs. EMX Royalty Corp | Copper Lake vs. BHP Group Limited | Copper Lake vs. Vale SA ADR | Copper Lake vs. Rio Tinto ADR |
| Global Battery vs. Puma Exploration | Global Battery vs. Sixty North Gold | Global Battery vs. Red Pine Exploration | Global Battery vs. Altamira Gold Corp |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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