Correlation Between NorthIsle Copper and Wallbridge Mining

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

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

Diversification Opportunities for NorthIsle Copper and Wallbridge Mining

0.19

Correlation Coefficient

NorthIsle Copper  Wallbridge Mining

Average diversification

The 3 months correlation between NorthIsle and Wallbridge is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding NorthIsle Copper and and Wallbridge Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wallbridge Mining and NorthIsle 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 NorthIsle Copper and are associated (or correlated) with Wallbridge Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wallbridge Mining has no effect on the direction of NorthIsle Copper i.e., NorthIsle Copper and Wallbridge Mining go up and down completely randomly.

Pair Corralation between NorthIsle Copper and Wallbridge Mining

Assuming the 90 days horizon NorthIsle Copper and is expected to generate 0.52 times more return on investment than Wallbridge Mining. However, NorthIsle Copper and is 1.93 times less risky than Wallbridge Mining. It trades about 0.23 of its potential returns per unit of risk. Wallbridge Mining is currently generating about 0.11 per unit of risk. If you would invest  29.00  in NorthIsle Copper and on December 3, 2024 and sell it today you would earn a total of  13.00  from holding NorthIsle Copper and or generate 44.83% return on investment over 90 days.

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

NorthIsle Copper and  vs.  Wallbridge Mining

NorthIsle Copper

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NorthIsle Copper and are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, NorthIsle Copper reported solid returns over the last few months and may actually be approaching a breakup point.

Wallbridge Mining

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wallbridge Mining are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Wallbridge Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NorthIsle Copper and Wallbridge Mining

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

The idea behind NorthIsle Copper and and Wallbridge Mining 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.