Correlation Between Copperbank Resources and Forza Petroleum

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

Diversification Opportunities for Copperbank Resources and Forza Petroleum

0.0

Correlation Coefficient

Copperbank Resources  Forza Petroleum

Pay attention - limited upside

The 3 months correlation between Copperbank and Forza is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Copperbank Resources Corp and Forza Petroleum Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forza Petroleum 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 Forza Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forza Petroleum has no effect on the direction of Copperbank Resources i.e., Copperbank Resources and Forza Petroleum go up and down completely randomly.

Pair Corralation between Copperbank Resources and Forza Petroleum

If you would invest  53.00  in Copperbank Resources Corp on December 21, 2024 and sell it today you would earn a total of  11.00  from holding Copperbank Resources Corp or generate 20.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Copperbank Resources Corp  vs.  Forza Petroleum Limited

Copperbank Resources Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Copperbank Resources Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, Copperbank Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Forza Petroleum

Risk-Adjusted Performance

Very Weak

Over the last 90 days Forza Petroleum Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Forza Petroleum is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Copperbank Resources and Forza Petroleum

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

The idea behind Copperbank Resources Corp and Forza Petroleum Limited 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 Commodity Directory module to find actively traded commodities issued by global exchanges.