Correlation Between Western Union and Southern Copper
Can any of the company-specific risk be diversified away by investing in both Western Union and Southern Copper 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 Union and Southern Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Western Union and Southern Copper, you can compare the effects of market volatilities on Western Union and Southern Copper 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 Union with a short position of Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and Southern Copper.
Diversification Opportunities for Western Union and Southern Copper
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Southern is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding The Western Union and Southern Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper and Western Union 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 The Western Union are associated (or correlated) with Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper has no effect on the direction of Western Union i.e., Western Union and Southern Copper go up and down completely randomly.
Pair Corralation between Western Union and Southern Copper
If you would invest 22,200 in The Western Union on September 13, 2024 and sell it today you would earn a total of 0.00 from holding The Western Union or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Western Union vs. Southern Copper
Performance |
| Timeline |
| Western Union |
| Southern Copper |
Western Union and Southern Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Union and Southern Copper
The main advantage of trading using opposite Western Union and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union position performs unexpectedly, Southern Copper 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 Southern Copper will offset losses from the drop in Southern Copper's long position.| Western Union vs. Micron Technology | Western Union vs. KB Home | Western Union vs. Samsung Electronics Co | Western Union vs. McEwen Mining |
| Southern Copper vs. The Select Sector | Southern Copper vs. Promotora y Operadora | Southern Copper vs. iShares Global Timber | Southern Copper vs. SPDR Series Trust |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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