Correlation Between Aldebaran Resources and Alpha Copper

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

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

Diversification Opportunities for Aldebaran Resources and Alpha Copper

-0.57

Correlation Coefficient

Aldebaran Resources  Alpha Copper

Excellent diversification

The 3 months correlation between Aldebaran and Alpha is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Aldebaran Resources and Alpha Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Copper Corp and Aldebaran Resources 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 Aldebaran Resources are associated (or correlated) with Alpha Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Copper Corp has no effect on the direction of Aldebaran Resources i.e., Aldebaran Resources and Alpha Copper go up and down completely randomly.

Pair Corralation between Aldebaran Resources and Alpha Copper

Assuming the 90 days horizon Aldebaran Resources is expected to generate 0.51 times more return on investment than Alpha Copper. However, Aldebaran Resources is 1.95 times less risky than Alpha Copper. It trades about 0.28 of its potential returns per unit of risk. Alpha Copper Corp is currently generating about 0.0 per unit of risk. If you would invest  69.00  in Aldebaran Resources on September 3, 2024 and sell it today you would earn a total of  81.00  from holding Aldebaran Resources or generate 117.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Aldebaran Resources  vs.  Alpha Copper Corp

Aldebaran Resources

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aldebaran Resources are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Aldebaran Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Alpha Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Aldebaran Resources and Alpha Copper

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

The idea behind Aldebaran Resources and Alpha Copper Corp 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.