Correlation Between Hudbay Minerals and Copper Fox

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

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

Diversification Opportunities for Hudbay Minerals and Copper Fox

-0.51

Correlation Coefficient

Hudbay Minerals  Copper Fox

Excellent diversification

The 3 months correlation between Hudbay and Copper is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Hudbay Minerals 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 Hudbay Minerals 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 Hudbay Minerals 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 Hudbay Minerals i.e., Hudbay Minerals and Copper Fox go up and down completely randomly.

Pair Corralation between Hudbay Minerals and Copper Fox

Considering the 90-day investment horizon Hudbay Minerals is expected to under-perform the Copper Fox. But the stock apears to be less risky and, when comparing its historical volatility, Hudbay Minerals is 1.77 times less risky than Copper Fox. The stock trades about -0.08 of its potential returns per unit of risk. The Copper Fox Metals is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  21.00  in Copper Fox Metals on September 20, 2024 and sell it today you would lose (2.00) from holding Copper Fox Metals or give up 9.52% of portfolio value over 90 days.

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

Hudbay Minerals  vs.  Copper Fox Metals

Hudbay Minerals

Risk-Adjusted Performance

3 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hudbay Minerals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental drivers, Hudbay Minerals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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

Pair Trading with Hudbay Minerals and Copper Fox

The main advantage of trading using opposite Hudbay Minerals and Copper Fox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudbay Minerals 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 Hudbay Minerals 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.