Correlation Between Alpha Copper and Sassy Resources

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

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

Diversification Opportunities for Alpha Copper and Sassy Resources

-0.6

Correlation Coefficient

Alpha Copper  Sassy Resources

Excellent diversification

The 3 months correlation between Alpha and Sassy is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Copper Corp and Sassy Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sassy Resources and Alpha 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 Alpha Copper Corp are associated (or correlated) with Sassy Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sassy Resources has no effect on the direction of Alpha Copper i.e., Alpha Copper and Sassy Resources go up and down completely randomly.

Pair Corralation between Alpha Copper and Sassy Resources

Assuming the 90 days horizon Alpha Copper is expected to generate 3.45 times less return on investment than Sassy Resources. But when comparing it to its historical volatility, Alpha Copper Corp is 1.81 times less risky than Sassy Resources. It trades about 0.02 of its potential returns per unit of risk. Sassy Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  47.00  in Sassy Resources on November 27, 2024 and sell it today you would lose (41.80) from holding Sassy Resources or give up 88.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

Alpha Copper Corp  vs.  Sassy Resources

Alpha Copper Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Copper Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Alpha Copper reported solid returns over the last few months and may actually be approaching a breakup point.

Sassy Resources

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Alpha Copper and Sassy Resources

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

The idea behind Alpha Copper Corp and Sassy Resources 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.