Correlation Between Marimaca Copper and Arizona Sonoran

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

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

Diversification Opportunities for Marimaca Copper and Arizona Sonoran

-0.79

Correlation Coefficient

Marimaca Copper  Arizona Sonoran

Pay attention - limited upside

The 3 months correlation between Marimaca and Arizona is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Marimaca Copper Corp and Arizona Sonoran Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arizona Sonoran Copper and Marimaca 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 Marimaca Copper Corp are associated (or correlated) with Arizona Sonoran. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arizona Sonoran Copper has no effect on the direction of Marimaca Copper i.e., Marimaca Copper and Arizona Sonoran go up and down completely randomly.

Pair Corralation between Marimaca Copper and Arizona Sonoran

Assuming the 90 days trading horizon Marimaca Copper Corp is expected to generate 0.64 times more return on investment than Arizona Sonoran. However, Marimaca Copper Corp is 1.57 times less risky than Arizona Sonoran. It trades about 0.07 of its potential returns per unit of risk. Arizona Sonoran Copper is currently generating about 0.01 per unit of risk. If you would invest  394.00  in Marimaca Copper Corp on September 1, 2024 and sell it today you would earn a total of  84.00  from holding Marimaca Copper Corp or generate 21.32% return on investment over 90 days.

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

Marimaca Copper Corp  vs.  Arizona Sonoran Copper

Marimaca Copper Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Marimaca Copper Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Marimaca Copper displayed solid returns over the last few months and may actually be approaching a breakup point.

Arizona Sonoran Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arizona Sonoran Copper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Marimaca Copper and Arizona Sonoran

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

The idea behind Marimaca Copper Corp and Arizona Sonoran Copper 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.