Correlation Between Kutcho Copper and Filo Mining

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

Diversification Opportunities for Kutcho Copper and Filo Mining

-0.56

Correlation Coefficient

Kutcho Copper  Filo Mining

Excellent diversification

The 3 months correlation between Kutcho and Filo is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Kutcho Copper Corp and Filo Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Filo Mining 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 Filo Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Filo Mining Corp has no effect on the direction of Kutcho Copper i.e., Kutcho Copper and Filo Mining go up and down completely randomly.

Pair Corralation between Kutcho Copper and Filo Mining

Assuming the 90 days horizon Kutcho Copper Corp is expected to generate 13.19 times more return on investment than Filo Mining. However, Kutcho Copper is 13.19 times more volatile than Filo Mining Corp. It trades about 0.1 of its potential returns per unit of risk. Filo Mining Corp is currently generating about 0.08 per unit of risk. If you would invest  6.58  in Kutcho Copper Corp on December 19, 2024 and sell it today you would earn a total of  2.57  from holding Kutcho Copper Corp or generate 39.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	33.9%
Values	Daily Returns

Kutcho Copper Corp  vs.  Filo Mining 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. Despite nearly fragile technical and fundamental indicators, Kutcho Copper reported solid returns over the last few months and may actually be approaching a breakup point.

Filo Mining Corp

Risk-Adjusted Performance

Modest

Over the last 90 days Filo Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Filo Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Kutcho Copper and Filo Mining

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

The idea behind Kutcho Copper Corp and Filo Mining 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.