Correlation Between Alta Copper and Luz Del

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

Diversification Opportunities for Alta Copper and Luz Del

0.57

Correlation Coefficient

Alta Copper  Luz Del

Very weak diversification

The 3 months correlation between Alta and Luz is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Alta Copper Corp and Luz del Sur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luz del Sur 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 Luz Del. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luz del Sur has no effect on the direction of Alta Copper i.e., Alta Copper and Luz Del go up and down completely randomly.

Pair Corralation between Alta Copper and Luz Del

Assuming the 90 days trading horizon Alta Copper Corp is expected to under-perform the Luz Del. In addition to that, Alta Copper is 9.61 times more volatile than Luz del Sur. It trades about -0.14 of its total potential returns per unit of risk. Luz del Sur is currently generating about -0.11 per unit of volatility. If you would invest  1,510  in Luz del Sur on December 21, 2024 and sell it today you would lose (130.00) from holding Luz del Sur or give up 8.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	31.03%
Values	Daily Returns

Alta Copper Corp  vs.  Luz del Sur

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 inconsistent 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.

Luz del Sur

Risk-Adjusted Performance

Very Weak

Over the last 90 days Luz del Sur has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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 Luz Del

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

The idea behind Alta Copper Corp and Luz del Sur 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.