Correlation Between Dor Copper and Copper Fox

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

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

Diversification Opportunities for Dor Copper and Copper Fox

0.19

Correlation Coefficient

Dor Copper  Copper Fox

Average diversification

The 3 months correlation between Dor and Copper is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Dor Copper Mining and Copper Fox Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper Fox Metals and Dor Copper 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 Dor Copper Mining are associated (or correlated) with Copper Fox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper Fox Metals has no effect on the direction of Dor Copper i.e., Dor Copper and Copper Fox go up and down completely randomly.

Pair Corralation between Dor Copper and Copper Fox

Assuming the 90 days horizon Dor Copper Mining is expected to generate 1.19 times more return on investment than Copper Fox. However, Dor Copper is 1.19 times more volatile than Copper Fox Metals. It trades about 0.0 of its potential returns per unit of risk. Copper Fox Metals is currently generating about -0.03 per unit of risk. If you would invest  12.00  in Dor Copper Mining on October 20, 2024 and sell it today you would lose (1.00) from holding Dor Copper Mining or give up 8.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	85.25%
Values	Daily Returns

Dor Copper Mining  vs.  Copper Fox Metals

Dor Copper Mining

Risk-Adjusted Performance

0 of 100

Very Weak

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

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. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Dor Copper and Copper Fox

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

The idea behind Dor Copper Mining and Copper Fox Metals 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.