Correlation Between Namibia Critical and Kutcho Copper

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

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

Diversification Opportunities for Namibia Critical and Kutcho Copper

0.55

Correlation Coefficient

Namibia Critical  Kutcho Copper

Very weak diversification

The 3 months correlation between Namibia and Kutcho is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Namibia Critical Metals and Kutcho Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kutcho Copper Corp and Namibia Critical 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 Namibia Critical Metals are associated (or correlated) with Kutcho Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kutcho Copper Corp has no effect on the direction of Namibia Critical i.e., Namibia Critical and Kutcho Copper go up and down completely randomly.

Pair Corralation between Namibia Critical and Kutcho Copper

Assuming the 90 days horizon Namibia Critical Metals is expected to generate 1.8 times more return on investment than Kutcho Copper. However, Namibia Critical is 1.8 times more volatile than Kutcho Copper Corp. It trades about 0.06 of its potential returns per unit of risk. Kutcho Copper Corp is currently generating about 0.08 per unit of risk. If you would invest  4.00  in Namibia Critical Metals on October 23, 2024 and sell it today you would earn a total of  0.00  from holding Namibia Critical Metals or generate 0.0% return on investment over 90 days.

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

Namibia Critical Metals  vs.  Kutcho Copper Corp

Namibia Critical Metals

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Namibia Critical Metals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Namibia Critical showed solid returns over the last few months and may actually be approaching a breakup point.

Kutcho Copper Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kutcho Copper Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Kutcho Copper showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Namibia Critical and Kutcho Copper

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

The idea behind Namibia Critical Metals and Kutcho 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..