Correlation Between Libero Copper and Northwest Copper

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

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

Diversification Opportunities for Libero Copper and Northwest Copper

0.66

Correlation Coefficient

Libero Copper  Northwest Copper

Poor diversification

The 3 months correlation between Libero and Northwest is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Libero Copper Corp and Northwest Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northwest Copper Corp and Libero 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 Libero Copper Corp are associated (or correlated) with Northwest Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northwest Copper Corp has no effect on the direction of Libero Copper i.e., Libero Copper and Northwest Copper go up and down completely randomly.

Pair Corralation between Libero Copper and Northwest Copper

Assuming the 90 days horizon Libero Copper Corp is expected to under-perform the Northwest Copper. But the stock apears to be less risky and, when comparing its historical volatility, Libero Copper Corp is 1.54 times less risky than Northwest Copper. The stock trades about -0.12 of its potential returns per unit of risk. The Northwest Copper Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  24.00  in Northwest Copper Corp on December 21, 2024 and sell it today you would lose (4.00) from holding Northwest Copper Corp or give up 16.67% of portfolio value over 90 days.

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

Libero Copper Corp  vs.  Northwest Copper Corp

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 weak 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.

Northwest Copper Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Northwest Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Northwest Copper is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Libero Copper and Northwest Copper

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

The idea behind Libero Copper Corp and Northwest 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.