Correlation Between Kodiak Copper and Surge Copper

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

Diversification Opportunities for Kodiak Copper and Surge Copper

0.41

Correlation Coefficient

Kodiak Copper  Surge Copper

Very weak diversification

The 3 months correlation between Kodiak and Surge is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Kodiak Copper Corp and Surge Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge 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 Surge Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Copper Corp has no effect on the direction of Kodiak Copper i.e., Kodiak Copper and Surge Copper go up and down completely randomly.

Pair Corralation between Kodiak Copper and Surge Copper

Assuming the 90 days horizon Kodiak Copper Corp is expected to under-perform the Surge Copper. But the stock apears to be less risky and, when comparing its historical volatility, Kodiak Copper Corp is 3.97 times less risky than Surge Copper. The stock trades about -0.13 of its potential returns per unit of risk. The Surge Copper Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  10.00  in Surge Copper Corp on September 12, 2024 and sell it today you would lose (0.50) from holding Surge Copper Corp or give up 5.0% of portfolio value over 90 days.

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

Kodiak Copper Corp  vs.  Surge Copper Corp

Kodiak Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kodiak Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Surge Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Surge Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 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 Surge Copper

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

The idea behind Kodiak Copper Corp and Surge 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.