Correlation Between Northwest Copper and I 80

Can any of the company-specific risk be diversified away by investing in both Northwest Copper and I 80 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 Northwest Copper and I 80 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Northwest Copper Corp and i 80 Gold Corp, you can compare the effects of market volatilities on Northwest Copper and I 80 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 Northwest Copper with a short position of I 80. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northwest Copper and I 80.

Diversification Opportunities for Northwest Copper and I 80

-0.4

Correlation Coefficient

Northwest Copper  I 80

Very good diversification

The 3 months correlation between Northwest and IAU is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Northwest Copper Corp and i 80 Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on i 80 Gold and Northwest 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 Northwest Copper Corp are associated (or correlated) with I 80. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of i 80 Gold has no effect on the direction of Northwest Copper i.e., Northwest Copper and I 80 go up and down completely randomly.

Pair Corralation between Northwest Copper and I 80

Assuming the 90 days trading horizon Northwest Copper Corp is expected to under-perform the I 80. In addition to that, Northwest Copper is 1.34 times more volatile than i 80 Gold Corp. It trades about 0.0 of its total potential returns per unit of risk. i 80 Gold Corp is currently generating about 0.12 per unit of volatility. If you would invest  74.00  in i 80 Gold Corp on December 21, 2024 and sell it today you would earn a total of  28.00  from holding i 80 Gold Corp or generate 37.84% return on investment over 90 days.

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

Northwest Copper Corp  vs.  i 80 Gold Corp

Northwest Copper Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Northwest Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Northwest Copper is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

i 80 Gold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in i 80 Gold Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, I 80 displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Northwest Copper and I 80

The main advantage of trading using opposite Northwest Copper and I 80 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northwest Copper position performs unexpectedly, I 80 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 I 80 will offset losses from the drop in I 80's long position.

The idea behind Northwest Copper Corp and i 80 Gold 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.