Correlation Between Copper Fox and Copper Mountain

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

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

Diversification Opportunities for Copper Fox and Copper Mountain

-0.07

Correlation Coefficient

Copper Fox  Copper Mountain

Good diversification

The 3 months correlation between Copper and Copper is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Copper Fox Metals and Copper Mountain Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper Mountain Mining and Copper Fox 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 Fox Metals are associated (or correlated) with Copper Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper Mountain Mining has no effect on the direction of Copper Fox i.e., Copper Fox and Copper Mountain go up and down completely randomly.

Pair Corralation between Copper Fox and Copper Mountain

Assuming the 90 days horizon Copper Fox is expected to generate 57.88 times less return on investment than Copper Mountain. But when comparing it to its historical volatility, Copper Fox Metals is 19.24 times less risky than Copper Mountain. It trades about 0.05 of its potential returns per unit of risk. Copper Mountain Mining is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  126.00  in Copper Mountain Mining on September 20, 2024 and sell it today you would lose (109.00) from holding Copper Mountain Mining or give up 86.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	78.02%
Values	Daily Returns

Copper Fox Metals  vs.  Copper Mountain Mining

Copper Fox Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Copper Fox Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Copper Fox is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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.

Pair Trading with Copper Fox and Copper Mountain

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

The idea behind Copper Fox Metals and Copper Mountain Mining 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.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.