Correlation Between Faction Investment and Getty Copper

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

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

Diversification Opportunities for Faction Investment and Getty Copper

0.0

Correlation Coefficient

Faction Investment  Getty Copper

Pay attention - limited upside

The 3 months correlation between Faction and Getty is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Faction Investment Group and Getty Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Copper and Faction Investment 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 Faction Investment Group are associated (or correlated) with Getty Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Copper has no effect on the direction of Faction Investment i.e., Faction Investment and Getty Copper go up and down completely randomly.

Pair Corralation between Faction Investment and Getty Copper

Assuming the 90 days trading horizon Faction Investment Group is expected to under-perform the Getty Copper. But the stock apears to be less risky and, when comparing its historical volatility, Faction Investment Group is 1.91 times less risky than Getty Copper. The stock trades about -0.02 of its potential returns per unit of risk. The Getty Copper is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  5.00  in Getty Copper on October 3, 2024 and sell it today you would lose (2.00) from holding Getty Copper or give up 40.0% of portfolio value over 90 days.

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

Faction Investment Group  vs.  Getty Copper

Faction Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Faction Investment Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Faction Investment is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Getty Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Getty Copper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Faction Investment and Getty Copper

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

The idea behind Faction Investment Group and Getty Copper 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 Transaction History module to view history of all your transactions and understand their impact on performance.