Correlation Between Kodiak Copper and Libero Copper

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

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

Diversification Opportunities for Kodiak Copper and Libero Copper

-0.79

Correlation Coefficient

Kodiak Copper  Libero Copper

Pay attention - limited upside

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

Pair Corralation between Kodiak Copper and Libero Copper

Assuming the 90 days horizon Kodiak Copper Corp is expected to generate 0.75 times more return on investment than Libero Copper. However, Kodiak Copper Corp is 1.33 times less risky than Libero Copper. It trades about 0.15 of its potential returns per unit of risk. Libero Copper Corp is currently generating about -0.08 per unit of risk. If you would invest  36.00  in Kodiak Copper Corp on December 29, 2024 and sell it today you would earn a total of  14.00  from holding Kodiak Copper Corp or generate 38.89% return on investment over 90 days.

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

Kodiak Copper Corp  vs.  Libero Copper Corp

Kodiak Copper Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kodiak Copper Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Kodiak Copper showed solid returns over the last few months and may actually be approaching a breakup point.

Libero Copper Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Libero Copper Corp 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 April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Kodiak Copper and Libero Copper

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

The idea behind Kodiak Copper Corp and Libero 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.