Correlation Between Arctic Star and Fabled Copper

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

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

Diversification Opportunities for Arctic Star and Fabled Copper

0.0

Correlation Coefficient

Arctic Star  Fabled Copper

Pay attention - limited upside

The 3 months correlation between Arctic and Fabled is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Arctic Star Exploration and Fabled Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fabled Copper Corp and Arctic Star 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 Arctic Star Exploration are associated (or correlated) with Fabled Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fabled Copper Corp has no effect on the direction of Arctic Star i.e., Arctic Star and Fabled Copper go up and down completely randomly.

Pair Corralation between Arctic Star and Fabled Copper

If you would invest  0.99  in Arctic Star Exploration on December 26, 2024 and sell it today you would earn a total of  0.40  from holding Arctic Star Exploration or generate 40.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	54.84%
Values	Daily Returns

Arctic Star Exploration  vs.  Fabled Copper Corp

Arctic Star Exploration

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Arctic Star Exploration are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Arctic Star reported solid returns over the last few months and may actually be approaching a breakup point.

Fabled Copper Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fabled Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Fabled 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 Arctic Star and Fabled Copper

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

The idea behind Arctic Star Exploration and Fabled 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.