Correlation Between Copper Mountain and Taseko Mines

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

Diversification Opportunities for Copper Mountain and Taseko Mines

0.81

Correlation Coefficient

Copper Mountain  Taseko Mines

Very poor diversification

The 3 months correlation between Copper and Taseko is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Copper Mountain Mining and Taseko Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taseko Mines 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 Taseko Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taseko Mines has no effect on the direction of Copper Mountain i.e., Copper Mountain and Taseko Mines go up and down completely randomly.

Pair Corralation between Copper Mountain and Taseko Mines

Assuming the 90 days horizon Copper Mountain Mining is expected to under-perform the Taseko Mines. In addition to that, Copper Mountain is 2.23 times more volatile than Taseko Mines. It trades about -0.06 of its total potential returns per unit of risk. Taseko Mines is currently generating about -0.05 per unit of volatility. If you would invest  224.00  in Taseko Mines on September 19, 2024 and sell it today you would lose (32.00) from holding Taseko Mines or give up 14.29% of portfolio value over 90 days.

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

Copper Mountain Mining  vs.  Taseko Mines

Copper Mountain Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Copper Mountain Mining 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 primary 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.

Taseko Mines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Taseko Mines has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Copper Mountain and Taseko Mines

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

The idea behind Copper Mountain Mining and Taseko Mines 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.