Correlation Between Copperbank Resources and Capstone Copper

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

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

Diversification Opportunities for Copperbank Resources and Capstone Copper

0.61

Correlation Coefficient

Copperbank Resources  Capstone Copper

Poor diversification

The 3 months correlation between Copperbank and Capstone is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Copperbank Resources Corp and Capstone Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstone Copper Corp and Copperbank Resources 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 Copperbank Resources Corp are associated (or correlated) with Capstone Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstone Copper Corp has no effect on the direction of Copperbank Resources i.e., Copperbank Resources and Capstone Copper go up and down completely randomly.

Pair Corralation between Copperbank Resources and Capstone Copper

Assuming the 90 days horizon Copperbank Resources Corp is expected to under-perform the Capstone Copper. In addition to that, Copperbank Resources is 1.17 times more volatile than Capstone Copper Corp. It trades about -0.16 of its total potential returns per unit of risk. Capstone Copper Corp is currently generating about -0.16 per unit of volatility. If you would invest  733.00  in Capstone Copper Corp on September 22, 2024 and sell it today you would lose (133.00) from holding Capstone Copper Corp or give up 18.14% of portfolio value over 90 days.

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

Copperbank Resources Corp  vs.  Capstone Copper Corp

Copperbank Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Copperbank Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's forward-looking signals remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Capstone Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Copperbank Resources and Capstone Copper

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

The idea behind Copperbank Resources Corp and Capstone 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.