Correlation Between Western Copper and PARAGON GROUP

Can any of the company-specific risk be diversified away by investing in both Western Copper and PARAGON GROUP 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 Copper and PARAGON GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Western Copper and and PARAGON GROUP, you can compare the effects of market volatilities on Western Copper and PARAGON GROUP 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 Copper with a short position of PARAGON GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and PARAGON GROUP.

Diversification Opportunities for Western Copper and PARAGON GROUP

0.02

Correlation Coefficient

Western Copper  PARAGON GROUP

Significant diversification

The 3 months correlation between Western and PARAGON is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and PARAGON GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARAGON GROUP and Western Copper 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 Western Copper and are associated (or correlated) with PARAGON GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARAGON GROUP has no effect on the direction of Western Copper i.e., Western Copper and PARAGON GROUP go up and down completely randomly.

Pair Corralation between Western Copper and PARAGON GROUP

Assuming the 90 days trading horizon Western Copper and is expected to generate 1.69 times more return on investment than PARAGON GROUP. However, Western Copper is 1.69 times more volatile than PARAGON GROUP. It trades about 0.09 of its potential returns per unit of risk. PARAGON GROUP is currently generating about -0.32 per unit of risk. If you would invest  101.00  in Western Copper and on October 10, 2024 and sell it today you would earn a total of  3.00  from holding Western Copper and or generate 2.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Western Copper and  vs.  PARAGON GROUP

Western Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Copper and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Western Copper is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

PARAGON GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PARAGON GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, PARAGON GROUP is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Western Copper and PARAGON GROUP

The main advantage of trading using opposite Western Copper and PARAGON GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, PARAGON GROUP 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 PARAGON GROUP will offset losses from the drop in PARAGON GROUP's long position.

The idea behind Western Copper and and PARAGON GROUP pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.