Correlation Between Callinex Mines and Kutcho Copper

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

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

Diversification Opportunities for Callinex Mines and Kutcho Copper

0.83

Correlation Coefficient

Callinex Mines  Kutcho Copper

Very poor diversification

The 3 months correlation between Callinex and Kutcho is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Callinex Mines and Kutcho Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kutcho Copper Corp and Callinex Mines 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 Callinex Mines are associated (or correlated) with Kutcho Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kutcho Copper Corp has no effect on the direction of Callinex Mines i.e., Callinex Mines and Kutcho Copper go up and down completely randomly.

Pair Corralation between Callinex Mines and Kutcho Copper

Assuming the 90 days horizon Callinex Mines is expected to generate 28.17 times less return on investment than Kutcho Copper. But when comparing it to its historical volatility, Callinex Mines is 4.43 times less risky than Kutcho Copper. It trades about 0.02 of its potential returns per unit of risk. Kutcho Copper Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  7.00  in Kutcho Copper Corp on October 12, 2024 and sell it today you would earn a total of  0.71  from holding Kutcho Copper Corp or generate 10.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Callinex Mines  vs.  Kutcho Copper Corp

Callinex Mines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Callinex Mines has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Kutcho Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kutcho Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Kutcho 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 Callinex Mines and Kutcho Copper

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

The idea behind Callinex Mines and Kutcho 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.