Correlation Between Copper Mountain and Aguila American
Can any of the company-specific risk be diversified away by investing in both Copper Mountain and Aguila American 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 Copper Mountain and Aguila American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Copper Mountain Mining and Aguila American Gold, you can compare the effects of market volatilities on Copper Mountain and Aguila American 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 Copper Mountain with a short position of Aguila American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copper Mountain and Aguila American.
Diversification Opportunities for Copper Mountain and Aguila American
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Copper and Aguila is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Copper Mountain Mining and Aguila American Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aguila American Gold and Copper Mountain 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 Copper Mountain Mining are associated (or correlated) with Aguila American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aguila American Gold has no effect on the direction of Copper Mountain i.e., Copper Mountain and Aguila American go up and down completely randomly.
Pair Corralation between Copper Mountain and Aguila American
Assuming the 90 days horizon Copper Mountain Mining is expected to generate 16.26 times more return on investment than Aguila American. However, Copper Mountain is 16.26 times more volatile than Aguila American Gold. It trades about 0.15 of its potential returns per unit of risk. Aguila American Gold is currently generating about 0.1 per unit of risk. If you would invest 0.01 in Copper Mountain Mining on September 20, 2024 and sell it today you would earn a total of 16.99 from holding Copper Mountain Mining or generate 169900.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 84.68% |
Values | Daily Returns |
Copper Mountain Mining vs. Aguila American Gold
Performance |
Timeline |
Copper Mountain Mining |
Aguila American Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Copper Mountain and Aguila American Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Copper Mountain and Aguila American
The main advantage of trading using opposite Copper Mountain and Aguila American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copper Mountain position performs unexpectedly, Aguila American 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 Aguila American will offset losses from the drop in Aguila American's long position.Copper Mountain vs. Ero Copper Corp | Copper Mountain vs. Copper Fox Metals | Copper Mountain vs. First Quantum Minerals | Copper Mountain vs. Hudbay Minerals |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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