Correlation Between Jiangxi Copper and Marimaca Copper

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

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

Diversification Opportunities for Jiangxi Copper and Marimaca Copper

-0.79

Correlation Coefficient

Jiangxi Copper  Marimaca Copper

Pay attention - limited upside

The 3 months correlation between Jiangxi and Marimaca is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi Copper and Marimaca Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marimaca Copper Corp and Jiangxi 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 Jiangxi Copper are associated (or correlated) with Marimaca Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marimaca Copper Corp has no effect on the direction of Jiangxi Copper i.e., Jiangxi Copper and Marimaca Copper go up and down completely randomly.

Pair Corralation between Jiangxi Copper and Marimaca Copper

Assuming the 90 days horizon Jiangxi Copper is expected to under-perform the Marimaca Copper. But the pink sheet apears to be less risky and, when comparing its historical volatility, Jiangxi Copper is 8.6 times less risky than Marimaca Copper. The pink sheet trades about -0.27 of its potential returns per unit of risk. The Marimaca Copper Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  311.00  in Marimaca Copper Corp on December 22, 2024 and sell it today you would earn a total of  77.00  from holding Marimaca Copper Corp or generate 24.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	70.0%
Values	Daily Returns

Jiangxi Copper  vs.  Marimaca Copper Corp

Jiangxi Copper

Risk-Adjusted Performance

Very Weak

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

Marimaca Copper Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Marimaca Copper Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent forward indicators, Marimaca Copper reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jiangxi Copper and Marimaca Copper

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

The idea behind Jiangxi Copper and Marimaca Copper 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.