Correlation Between Alta Copper and InRetail Peru

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

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

Diversification Opportunities for Alta Copper and InRetail Peru

0.44

Correlation Coefficient

Alta Copper  InRetail Peru

Very weak diversification

The 3 months correlation between Alta and InRetail is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Alta Copper Corp and InRetail Peru Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InRetail Peru Corp and Alta 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 Alta Copper Corp are associated (or correlated) with InRetail Peru. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InRetail Peru Corp has no effect on the direction of Alta Copper i.e., Alta Copper and InRetail Peru go up and down completely randomly.

Pair Corralation between Alta Copper and InRetail Peru

Assuming the 90 days trading horizon Alta Copper Corp is expected to under-perform the InRetail Peru. In addition to that, Alta Copper is 10.39 times more volatile than InRetail Peru Corp. It trades about -0.14 of its total potential returns per unit of risk. InRetail Peru Corp is currently generating about -0.1 per unit of volatility. If you would invest  3,130  in InRetail Peru Corp on December 24, 2024 and sell it today you would lose (230.00) from holding InRetail Peru Corp or give up 7.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	30.0%
Values	Daily Returns

Alta Copper Corp  vs.  InRetail Peru Corp

Alta Copper Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alta Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

InRetail Peru Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days InRetail Peru Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Alta Copper and InRetail Peru

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

The idea behind Alta Copper Corp and InRetail Peru 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.