Correlation Between Kodiak Copper and Fabled Copper

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

Diversification Opportunities for Kodiak Copper and Fabled Copper

0.0

Correlation Coefficient

Kodiak Copper  Fabled Copper

Pay attention - limited upside

The 3 months correlation between Kodiak and Fabled is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kodiak Copper Corp and Fabled Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fabled 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 Fabled Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fabled Copper Corp has no effect on the direction of Kodiak Copper i.e., Kodiak Copper and Fabled Copper go up and down completely randomly.

Pair Corralation between Kodiak Copper and Fabled Copper

Assuming the 90 days horizon Kodiak Copper Corp is expected to under-perform the Fabled Copper. But the otc stock apears to be less risky and, when comparing its historical volatility, Kodiak Copper Corp is 1.37 times less risky than Fabled Copper. The otc stock trades about -0.02 of its potential returns per unit of risk. The Fabled Copper Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  4.27  in Fabled Copper Corp on September 14, 2024 and sell it today you would lose (1.75) from holding Fabled Copper Corp or give up 40.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Kodiak Copper Corp  vs.  Fabled Copper Corp

Kodiak Copper Corp

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Kodiak Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Fabled Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Kodiak Copper and Fabled Copper

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

The idea behind Kodiak Copper Corp and Fabled 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 Commodity Directory module to find actively traded commodities issued by global exchanges.