Correlation Between Aguila American and Copperbank Resources

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

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

Diversification Opportunities for Aguila American and Copperbank Resources

-0.57

Correlation Coefficient

Aguila American  Copperbank Resources

Excellent diversification

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

Pair Corralation between Aguila American and Copperbank Resources

If you would invest  28.00  in Aguila American Gold on September 22, 2024 and sell it today you would earn a total of  0.00  from holding Aguila American Gold or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Aguila American Gold  vs.  Copperbank Resources Corp

Aguila American Gold

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Aguila American Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Aguila American reported solid returns over the last few months and may actually be approaching a breakup point.

Copperbank Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Copperbank Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's forward-looking signals remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Aguila American and Copperbank Resources

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

The idea behind Aguila American Gold and Copperbank Resources 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.