Correlation Between Antofagasta PLC and Copper Mountain

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

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

Diversification Opportunities for Antofagasta PLC and Copper Mountain

0.76

Correlation Coefficient

Antofagasta PLC  Copper Mountain

Poor diversification

The 3 months correlation between Antofagasta and Copper is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Antofagasta PLC and Copper Mountain Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper Mountain Mining and Antofagasta PLC 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 Antofagasta PLC are associated (or correlated) with Copper Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper Mountain Mining has no effect on the direction of Antofagasta PLC i.e., Antofagasta PLC and Copper Mountain go up and down completely randomly.

Pair Corralation between Antofagasta PLC and Copper Mountain

Assuming the 90 days horizon Antofagasta PLC is expected to generate 0.47 times more return on investment than Copper Mountain. However, Antofagasta PLC is 2.11 times less risky than Copper Mountain. It trades about -0.01 of its potential returns per unit of risk. Copper Mountain Mining is currently generating about -0.29 per unit of risk. If you would invest  2,120  in Antofagasta PLC on September 19, 2024 and sell it today you would lose (31.00) from holding Antofagasta PLC or give up 1.46% of portfolio value over 90 days.

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

Antofagasta PLC  vs.  Copper Mountain Mining

Antofagasta PLC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Copper Mountain Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Copper Mountain Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Antofagasta PLC and Copper Mountain

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

The idea behind Antofagasta PLC and Copper Mountain Mining 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.