Correlation Between First Quantum and Copperbank Resources

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

By analyzing existing cross correlation between First Quantum Minerals and Copperbank Resources Corp, you can compare the effects of market volatilities on First Quantum and Copperbank Resources 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 First Quantum with a short position of Copperbank Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Quantum and Copperbank Resources.

Diversification Opportunities for First Quantum and Copperbank Resources

-0.23

Correlation Coefficient

First Quantum  Copperbank Resources

Very good diversification

The 3 months correlation between First and Copperbank is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding First Quantum Minerals and Copperbank Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copperbank Resources Corp and First Quantum 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 First Quantum Minerals are associated (or correlated) with Copperbank Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copperbank Resources Corp has no effect on the direction of First Quantum i.e., First Quantum and Copperbank Resources go up and down completely randomly.

Pair Corralation between First Quantum and Copperbank Resources

Assuming the 90 days horizon First Quantum Minerals is expected to under-perform the Copperbank Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, First Quantum Minerals is 1.03 times less risky than Copperbank Resources. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Copperbank Resources Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  40.00  in Copperbank Resources Corp on September 20, 2024 and sell it today you would earn a total of  9.00  from holding Copperbank Resources Corp or generate 22.5% return on investment over 90 days.

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

First Quantum Minerals  vs.  Copperbank Resources Corp

First Quantum Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

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

Copperbank Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Copperbank Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward-looking signals remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with First Quantum and Copperbank Resources

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

The idea behind First Quantum Minerals and Copperbank Resources Corp 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.