Correlation Between Copper Lake and Silver Spruce
Can any of the company-specific risk be diversified away by investing in both Copper Lake and Silver Spruce 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 Silver Spruce 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 Silver Spruce Resources, you can compare the effects of market volatilities on Copper Lake and Silver Spruce 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 Silver Spruce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copper Lake and Silver Spruce.
Diversification Opportunities for Copper Lake and Silver Spruce
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Copper and Silver is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Copper Lake Resources and Silver Spruce Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Spruce 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 Silver Spruce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Spruce Resources has no effect on the direction of Copper Lake i.e., Copper Lake and Silver Spruce go up and down completely randomly.
Pair Corralation between Copper Lake and Silver Spruce
Assuming the 90 days horizon Copper Lake Resources is expected to generate 5.94 times more return on investment than Silver Spruce. However, Copper Lake is 5.94 times more volatile than Silver Spruce Resources. It trades about 0.17 of its potential returns per unit of risk. Silver Spruce Resources is currently generating about 0.07 per unit of risk. If you would invest 0.63 in Copper Lake Resources on October 28, 2024 and sell it today you would earn a total of 0.07 from holding Copper Lake Resources or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copper Lake Resources vs. Silver Spruce Resources
Performance |
| Timeline |
| Copper Lake Resources |
| Silver Spruce Resources |
Copper Lake and Silver Spruce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copper Lake and Silver Spruce
The main advantage of trading using opposite Copper Lake and Silver Spruce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copper Lake position performs unexpectedly, Silver Spruce 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 Silver Spruce will offset losses from the drop in Silver Spruce'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 |
| Silver Spruce vs. Arctic Star Exploration | Silver Spruce vs. American Clean Resources | Silver Spruce vs. Arras Minerals Corp | Silver Spruce vs. American Creek Resources |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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