Correlation Between Copper Fox and Eagle Plains

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

Diversification Opportunities for Copper Fox and Eagle Plains

-0.02

Correlation Coefficient

Copper Fox  Eagle Plains

Good diversification

The 3 months correlation between Copper and Eagle is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Copper Fox Metals and Eagle Plains Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Plains Resources 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 Eagle Plains. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Plains Resources has no effect on the direction of Copper Fox i.e., Copper Fox and Eagle Plains go up and down completely randomly.

Pair Corralation between Copper Fox and Eagle Plains

Assuming the 90 days horizon Copper Fox Metals is expected to under-perform the Eagle Plains. But the stock apears to be less risky and, when comparing its historical volatility, Copper Fox Metals is 2.01 times less risky than Eagle Plains. The stock trades about -0.18 of its potential returns per unit of risk. The Eagle Plains Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  10.00  in Eagle Plains Resources on September 24, 2024 and sell it today you would earn a total of  0.00  from holding Eagle Plains Resources or generate 0.0% return on investment over 90 days.

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

Copper Fox Metals  vs.  Eagle Plains Resources

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 latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Eagle Plains Resources

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Plains Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Eagle Plains is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Copper Fox and Eagle Plains

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

The idea behind Copper Fox Metals and Eagle Plains Resources 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.