Correlation Between Kutcho Copper and Transition Metals

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

Diversification Opportunities for Kutcho Copper and Transition Metals

-0.42

Correlation Coefficient

Kutcho Copper  Transition Metals

Very good diversification

The 3 months correlation between Kutcho and Transition is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Kutcho Copper Corp and Transition Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transition Metals Corp 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 Transition Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transition Metals Corp has no effect on the direction of Kutcho Copper i.e., Kutcho Copper and Transition Metals go up and down completely randomly.

Pair Corralation between Kutcho Copper and Transition Metals

Given the investment horizon of 90 days Kutcho Copper Corp is expected to generate 0.75 times more return on investment than Transition Metals. However, Kutcho Copper Corp is 1.33 times less risky than Transition Metals. It trades about 0.1 of its potential returns per unit of risk. Transition Metals Corp is currently generating about 0.02 per unit of risk. If you would invest  10.00  in Kutcho Copper Corp on December 23, 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 Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kutcho Copper Corp  vs.  Transition Metals Corp

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.

Transition Metals Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Transition Metals Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Transition Metals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Kutcho Copper and Transition Metals

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

The idea behind Kutcho Copper Corp and Transition Metals 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 Commodity Directory module to find actively traded commodities issued by global exchanges.