Correlation Between Imperial Metals and Dor Copper

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

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

Diversification Opportunities for Imperial Metals and Dor Copper

0.0

Correlation Coefficient

Imperial Metals  Dor Copper

Pay attention - limited upside

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

Pair Corralation between Imperial Metals and Dor Copper

Assuming the 90 days horizon Imperial Metals is expected to generate 0.55 times more return on investment than Dor Copper. However, Imperial Metals is 1.81 times less risky than Dor Copper. It trades about 0.1 of its potential returns per unit of risk. Dor Copper Mining is currently generating about 0.02 per unit of risk. If you would invest  126.00  in Imperial Metals on October 22, 2024 and sell it today you would earn a total of  6.00  from holding Imperial Metals or generate 4.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	44.44%
Values	Daily Returns

Imperial Metals  vs.  Dor Copper Mining

Imperial Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Imperial Metals 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 essential indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Dor Copper Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dor Copper Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's primary indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Imperial Metals and Dor Copper

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

The idea behind Imperial Metals and Dor Copper Mining 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.