Correlation Between Copperbank Resources and Hudbay Minerals

Can any of the company-specific risk be diversified away by investing in both Copperbank Resources and Hudbay Minerals 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 Hudbay Minerals 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 Hudbay Minerals, you can compare the effects of market volatilities on Copperbank Resources and Hudbay Minerals 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 Hudbay Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copperbank Resources and Hudbay Minerals.

Diversification Opportunities for Copperbank Resources and Hudbay Minerals

0.4

Correlation Coefficient

Copperbank Resources  Hudbay Minerals

Very weak diversification

The 3 months correlation between Copperbank and Hudbay is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Copperbank Resources Corp and Hudbay Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudbay Minerals 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 Hudbay Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudbay Minerals has no effect on the direction of Copperbank Resources i.e., Copperbank Resources and Hudbay Minerals go up and down completely randomly.

Pair Corralation between Copperbank Resources and Hudbay Minerals

Assuming the 90 days horizon Copperbank Resources Corp is expected to under-perform the Hudbay Minerals. But the otc stock apears to be less risky and, when comparing its historical volatility, Copperbank Resources Corp is 1.01 times less risky than Hudbay Minerals. The otc stock trades about -0.09 of its potential returns per unit of risk. The Hudbay Minerals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  782.00  in Hudbay Minerals on September 20, 2024 and sell it today you would earn a total of  54.00  from holding Hudbay Minerals or generate 6.91% return on investment over 90 days.

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

Copperbank Resources Corp  vs.  Hudbay Minerals

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 fragile performance in the last few months, the Stock's forward-looking signals 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.

Hudbay Minerals

Risk-Adjusted Performance

3 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hudbay Minerals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental drivers, Hudbay Minerals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Copperbank Resources and Hudbay Minerals

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

The idea behind Copperbank Resources Corp and Hudbay Minerals 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.