Correlation Between Marimaca Copper and TC Energy

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

Diversification Opportunities for Marimaca Copper and TC Energy

0.66

Correlation Coefficient

Marimaca Copper  TC Energy

Poor diversification

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

Pair Corralation between Marimaca Copper and TC Energy

Assuming the 90 days trading horizon Marimaca Copper Corp is expected to generate 2.48 times more return on investment than TC Energy. However, Marimaca Copper is 2.48 times more volatile than TC Energy Corp. It trades about 0.05 of its potential returns per unit of risk. TC Energy Corp is currently generating about 0.06 per unit of risk. If you would invest  346.00  in Marimaca Copper Corp on October 11, 2024 and sell it today you would earn a total of  184.00  from holding Marimaca Copper Corp or generate 53.18% return on investment over 90 days.

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

Marimaca Copper Corp  vs.  TC Energy Corp

Marimaca Copper Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Marimaca Copper Corp are ranked lower than 10 (%) 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.

TC Energy Corp

Risk-Adjusted Performance

17 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TC Energy Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, TC Energy may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Marimaca Copper and TC Energy

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

The idea behind Marimaca Copper Corp and TC Energy 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.