Correlation Between Kodiak Copper and Metallic Minerals

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

Diversification Opportunities for Kodiak Copper and Metallic Minerals

0.46

Correlation Coefficient

Kodiak Copper  Metallic Minerals

Very weak diversification

The 3 months correlation between Kodiak and Metallic is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Kodiak Copper Corp and Metallic Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metallic Minerals 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 Metallic Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metallic Minerals Corp has no effect on the direction of Kodiak Copper i.e., Kodiak Copper and Metallic Minerals go up and down completely randomly.

Pair Corralation between Kodiak Copper and Metallic Minerals

Assuming the 90 days horizon Kodiak Copper Corp is expected to generate 0.47 times more return on investment than Metallic Minerals. However, Kodiak Copper Corp is 2.14 times less risky than Metallic Minerals. It trades about -0.03 of its potential returns per unit of risk. Metallic Minerals Corp is currently generating about -0.05 per unit of risk. If you would invest  33.00  in Kodiak Copper Corp on August 31, 2024 and sell it today you would lose (3.00) from holding Kodiak Copper Corp or give up 9.09% 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.  Metallic Minerals 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. Despite nearly stable fundamental indicators, Kodiak Copper is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Metallic Minerals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Metallic Minerals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Kodiak Copper and Metallic Minerals

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

The idea behind Kodiak Copper Corp and Metallic Minerals 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.