Correlation Between Kutcho Copper and Black Widow

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

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

Diversification Opportunities for Kutcho Copper and Black Widow

0.15

Correlation Coefficient

Kutcho Copper  Black Widow

Average diversification

The 3 months correlation between Kutcho and Black is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kutcho Copper Corp and Black Widow Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Widow Resources and Kutcho 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 Kutcho Copper Corp are associated (or correlated) with Black Widow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Widow Resources has no effect on the direction of Kutcho Copper i.e., Kutcho Copper and Black Widow go up and down completely randomly.

Pair Corralation between Kutcho Copper and Black Widow

Given the investment horizon of 90 days Kutcho Copper Corp is expected to generate 0.78 times more return on investment than Black Widow. However, Kutcho Copper Corp is 1.29 times less risky than Black Widow. It trades about 0.08 of its potential returns per unit of risk. Black Widow Resources is currently generating about -0.07 per unit of risk. If you would invest  12.00  in Kutcho Copper Corp on October 23, 2024 and sell it today you would earn a total of  3.00  from holding Kutcho Copper Corp or generate 25.0% return on investment over 90 days.

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

Kutcho Copper Corp  vs.  Black Widow Resources

Kutcho Copper Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kutcho Copper Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Kutcho Copper showed solid returns over the last few months and may actually be approaching a breakup point.

Black Widow Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Black Widow Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Kutcho Copper and Black Widow

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

The idea behind Kutcho Copper Corp and Black Widow Resources 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.