Correlation Between Alpha Copper and US GoldMining

Can any of the company-specific risk be diversified away by investing in both Alpha Copper and US GoldMining 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 US GoldMining 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 US GoldMining Warrant, you can compare the effects of market volatilities on Alpha Copper and US GoldMining 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 US GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Copper and US GoldMining.

Diversification Opportunities for Alpha Copper and US GoldMining

-0.54

Correlation Coefficient

Alpha Copper  US GoldMining

Excellent diversification

The 3 months correlation between Alpha and USGOW is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Copper Corp and US GoldMining Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US GoldMining Warrant 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 US GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US GoldMining Warrant has no effect on the direction of Alpha Copper i.e., Alpha Copper and US GoldMining go up and down completely randomly.

Pair Corralation between Alpha Copper and US GoldMining

Assuming the 90 days horizon Alpha Copper Corp is expected to generate 1.06 times more return on investment than US GoldMining. However, Alpha Copper is 1.06 times more volatile than US GoldMining Warrant. It trades about 0.2 of its potential returns per unit of risk. US GoldMining Warrant is currently generating about 0.03 per unit of risk. If you would invest  9.90  in Alpha Copper Corp on December 28, 2024 and sell it today you would earn a total of  21.10  from holding Alpha Copper Corp or generate 213.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Alpha Copper Corp  vs.  US GoldMining Warrant

Alpha Copper Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Copper Corp are ranked lower than 16 (%) 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.

US GoldMining Warrant

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in US GoldMining Warrant are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, US GoldMining showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alpha Copper and US GoldMining

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

The idea behind Alpha Copper Corp and US GoldMining Warrant 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.