Correlation Between Liontown Resources and COPAUR MINERALS

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

By analyzing existing cross correlation between Liontown Resources Limited and COPAUR MINERALS INC, you can compare the effects of market volatilities on Liontown Resources and COPAUR 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 Liontown Resources with a short position of COPAUR MINERALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liontown Resources and COPAUR MINERALS.

Diversification Opportunities for Liontown Resources and COPAUR MINERALS

0.67

Correlation Coefficient

Liontown Resources  COPAUR MINERALS

Poor diversification

The 3 months correlation between Liontown and COPAUR is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Liontown Resources Limited and COPAUR MINERALS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COPAUR MINERALS INC and Liontown Resources 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 Liontown Resources Limited are associated (or correlated) with COPAUR MINERALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COPAUR MINERALS INC has no effect on the direction of Liontown Resources i.e., Liontown Resources and COPAUR MINERALS go up and down completely randomly.

Pair Corralation between Liontown Resources and COPAUR MINERALS

Assuming the 90 days horizon Liontown Resources Limited is expected to under-perform the COPAUR MINERALS. In addition to that, Liontown Resources is 1.33 times more volatile than COPAUR MINERALS INC. It trades about -0.16 of its total potential returns per unit of risk. COPAUR MINERALS INC is currently generating about -0.15 per unit of volatility. If you would invest  7.48  in COPAUR MINERALS INC on October 9, 2024 and sell it today you would lose (0.84) from holding COPAUR MINERALS INC or give up 11.23% of portfolio value over 90 days.

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

Liontown Resources Limited  vs.  COPAUR MINERALS INC

Liontown Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Liontown Resources Limited 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 basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

COPAUR MINERALS INC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Liontown Resources and COPAUR MINERALS

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

The idea behind Liontown Resources Limited and COPAUR MINERALS INC 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.