Correlation Between Ero Copper and Aquagold International
Can any of the company-specific risk be diversified away by investing in both Ero Copper and Aquagold International 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 Ero Copper and Aquagold International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ero Copper Corp and Aquagold International, you can compare the effects of market volatilities on Ero Copper and Aquagold International 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 Ero Copper with a short position of Aquagold International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ero Copper and Aquagold International.
Diversification Opportunities for Ero Copper and Aquagold International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ero and Aquagold is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ero Copper Corp and Aquagold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquagold International and Ero 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 Ero Copper Corp are associated (or correlated) with Aquagold International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquagold International has no effect on the direction of Ero Copper i.e., Ero Copper and Aquagold International go up and down completely randomly.
Pair Corralation between Ero Copper and Aquagold International
Considering the 90-day investment horizon Ero Copper Corp is expected to generate 0.47 times more return on investment than Aquagold International. However, Ero Copper Corp is 2.12 times less risky than Aquagold International. It trades about 0.01 of its potential returns per unit of risk. Aquagold International is currently generating about -0.13 per unit of risk. If you would invest 1,351 in Ero Copper Corp on December 26, 2024 and sell it today you would lose (12.00) from holding Ero Copper Corp or give up 0.89% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 96.83% |
Values | Daily Returns |
Ero Copper Corp vs. Aquagold International
Performance |
Timeline |
Ero Copper Corp |
Aquagold International |
Ero Copper and Aquagold International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ero Copper and Aquagold International
The main advantage of trading using opposite Ero Copper and Aquagold International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ero Copper position performs unexpectedly, Aquagold International 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 Aquagold International will offset losses from the drop in Aquagold International's long position.Ero Copper vs. Freeport McMoran Copper Gold | Ero Copper vs. Amerigo Resources | Ero Copper vs. Hudbay Minerals | Ero Copper vs. Capstone Copper Corp |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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