Correlation Between Kutcho Copper and Mundoro Capital

Can any of the company-specific risk be diversified away by investing in both Kutcho Copper and Mundoro Capital 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 Mundoro Capital 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 Mundoro Capital, you can compare the effects of market volatilities on Kutcho Copper and Mundoro Capital 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 Mundoro Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kutcho Copper and Mundoro Capital.

Diversification Opportunities for Kutcho Copper and Mundoro Capital

0.04

Correlation Coefficient

Kutcho Copper  Mundoro Capital

Significant diversification

The 3 months correlation between Kutcho and Mundoro is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Kutcho Copper Corp and Mundoro Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mundoro Capital 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 Mundoro Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mundoro Capital has no effect on the direction of Kutcho Copper i.e., Kutcho Copper and Mundoro Capital go up and down completely randomly.

Pair Corralation between Kutcho Copper and Mundoro Capital

Given the investment horizon of 90 days Kutcho Copper Corp is expected to generate 1.79 times more return on investment than Mundoro Capital. However, Kutcho Copper is 1.79 times more volatile than Mundoro Capital. It trades about 0.1 of its potential returns per unit of risk. Mundoro Capital is currently generating about 0.06 per unit of risk. If you would invest  10.00  in Kutcho Copper Corp on December 21, 2024 and sell it today you would earn a total of  4.00  from holding Kutcho Copper Corp or generate 40.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Kutcho Copper Corp  vs.  Mundoro Capital

Kutcho Copper Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kutcho Copper Corp are ranked lower than 8 (%) 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.

Mundoro Capital

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mundoro Capital are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Mundoro Capital showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kutcho Copper and Mundoro Capital

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

The idea behind Kutcho Copper Corp and Mundoro Capital 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.