Correlation Between Getty Copper and Aerofoam Metals

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

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

Diversification Opportunities for Getty Copper and Aerofoam Metals

-1.0

Correlation Coefficient

Getty Copper  Aerofoam Metals

Pay attention - limited upside

The 3 months correlation between Getty and Aerofoam is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding Getty Copper and Aerofoam Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerofoam Metals and Getty 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 Getty Copper are associated (or correlated) with Aerofoam Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerofoam Metals has no effect on the direction of Getty Copper i.e., Getty Copper and Aerofoam Metals go up and down completely randomly.

Pair Corralation between Getty Copper and Aerofoam Metals

Assuming the 90 days horizon Getty Copper is expected to generate 10.59 times less return on investment than Aerofoam Metals. But when comparing it to its historical volatility, Getty Copper is 7.84 times less risky than Aerofoam Metals. It trades about 0.04 of its potential returns per unit of risk. Aerofoam Metals is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Aerofoam Metals on October 4, 2024 and sell it today you would earn a total of  0.01  from holding Aerofoam Metals or generate 9.223372036854776E16% return on investment over 90 days.

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

Getty Copper  vs.  Aerofoam Metals

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. Despite nearly stable fundamental indicators, Getty Copper is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Aerofoam Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aerofoam Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, Aerofoam Metals is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Getty Copper and Aerofoam Metals

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

The idea behind Getty Copper and Aerofoam 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.