Correlation Between Cool and Marimaca Copper
Can any of the company-specific risk be diversified away by investing in both Cool and Marimaca 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 Cool and Marimaca Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cool Company and Marimaca Copper Corp, you can compare the effects of market volatilities on Cool and Marimaca 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 Cool with a short position of Marimaca Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cool and Marimaca Copper.
Diversification Opportunities for Cool and Marimaca Copper
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cool and Marimaca is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Cool Company and Marimaca Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marimaca Copper Corp and Cool 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 Cool Company are associated (or correlated) with Marimaca Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marimaca Copper Corp has no effect on the direction of Cool i.e., Cool and Marimaca Copper go up and down completely randomly.
Pair Corralation between Cool and Marimaca Copper
Given the investment horizon of 90 days Cool Company is expected to generate 0.54 times more return on investment than Marimaca Copper. However, Cool Company is 1.84 times less risky than Marimaca Copper. It trades about 0.18 of its potential returns per unit of risk. Marimaca Copper Corp is currently generating about 0.06 per unit of risk. If you would invest 761.00 in Cool Company on October 11, 2024 and sell it today you would earn a total of 60.00 from holding Cool Company or generate 7.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Cool Company vs. Marimaca Copper Corp
Performance |
Timeline |
Cool Company |
Marimaca Copper Corp |
Cool and Marimaca Copper Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cool and Marimaca Copper
The main advantage of trading using opposite Cool and Marimaca Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cool position performs unexpectedly, Marimaca 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 Marimaca Copper will offset losses from the drop in Marimaca Copper's long position.Cool vs. Marimaca Copper Corp | Cool vs. Worthington Steel | Cool vs. Copperbank Resources Corp | Cool vs. East Africa 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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