Correlation Between Bell Copper and Jiangxi Copper
Can any of the company-specific risk be diversified away by investing in both Bell Copper and Jiangxi 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 Bell Copper and Jiangxi Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bell Copper and Jiangxi Copper, you can compare the effects of market volatilities on Bell Copper and Jiangxi 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 Bell Copper with a short position of Jiangxi Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bell Copper and Jiangxi Copper.
Diversification Opportunities for Bell Copper and Jiangxi Copper
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bell and Jiangxi is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bell Copper and Jiangxi Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Copper and Bell 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 Bell Copper are associated (or correlated) with Jiangxi Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Copper has no effect on the direction of Bell Copper i.e., Bell Copper and Jiangxi Copper go up and down completely randomly.
Pair Corralation between Bell Copper and Jiangxi Copper
Assuming the 90 days horizon Bell Copper is expected to generate 2.1 times more return on investment than Jiangxi Copper. However, Bell Copper is 2.1 times more volatile than Jiangxi Copper. It trades about 0.02 of its potential returns per unit of risk. Jiangxi Copper is currently generating about 0.03 per unit of risk. If you would invest 9.80 in Bell Copper on September 25, 2024 and sell it today you would lose (7.60) from holding Bell Copper or give up 77.55% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 60.89% |
Values | Daily Returns |
Bell Copper vs. Jiangxi Copper
Performance |
Timeline |
Bell Copper |
Jiangxi Copper |
Bell Copper and Jiangxi Copper Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bell Copper and Jiangxi Copper
The main advantage of trading using opposite Bell Copper and Jiangxi Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bell Copper position performs unexpectedly, Jiangxi 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 Jiangxi Copper will offset losses from the drop in Jiangxi Copper's long position.Bell Copper vs. Arizona Sonoran Copper | Bell Copper vs. Dor Copper Mining | Bell Copper vs. CopperCorp Resources | Bell Copper vs. Copper Fox Metals |
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Check out your portfolio center.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 Stocks Directory module to find actively traded stocks across global markets.
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