Correlation Between KGHM Polska and Copper Mountain

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

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

Diversification Opportunities for KGHM Polska and Copper Mountain

-0.86

Correlation Coefficient

KGHM Polska  Copper Mountain

Pay attention - limited upside

The 3 months correlation between KGHM and Copper is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding KGHM Polska Miedz and Copper Mountain Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper Mountain Mining and KGHM Polska 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 KGHM Polska Miedz are associated (or correlated) with Copper Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper Mountain Mining has no effect on the direction of KGHM Polska i.e., KGHM Polska and Copper Mountain go up and down completely randomly.

Pair Corralation between KGHM Polska and Copper Mountain

If you would invest  3,889  in KGHM Polska Miedz on September 20, 2024 and sell it today you would earn a total of  0.00  from holding KGHM Polska Miedz or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	2.38%
Values	Daily Returns

KGHM Polska Miedz  vs.  Copper Mountain Mining

KGHM Polska Miedz

Risk-Adjusted Performance

0 of 100

Very Weak

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

Copper Mountain Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Copper Mountain Mining 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 primary 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.

Pair Trading with KGHM Polska and Copper Mountain

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

The idea behind KGHM Polska Miedz and Copper Mountain Mining 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.