Correlation Between Eagle Plains and Copper Fox

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

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

Diversification Opportunities for Eagle Plains and Copper Fox

-0.01

Correlation Coefficient

Eagle Plains  Copper Fox

Good diversification

The 3 months correlation between Eagle and Copper is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Plains Resources 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 Eagle Plains 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 Eagle Plains Resources 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 Eagle Plains i.e., Eagle Plains and Copper Fox go up and down completely randomly.

Pair Corralation between Eagle Plains and Copper Fox

Assuming the 90 days horizon Eagle Plains Resources is expected to under-perform the Copper Fox. But the stock apears to be less risky and, when comparing its historical volatility, Eagle Plains Resources is 1.98 times less risky than Copper Fox. The stock trades about 0.0 of its potential returns per unit of risk. The Copper Fox Metals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  22.00  in Copper Fox Metals on September 20, 2024 and sell it today you would earn a total of  5.00  from holding Copper Fox Metals or generate 22.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Eagle Plains Resources  vs.  Copper Fox Metals

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.

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.

Pair Trading with Eagle Plains and Copper Fox

The main advantage of trading using opposite Eagle Plains and Copper Fox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Plains 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 Eagle Plains Resources 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.