Correlation Between Pan American and Ero Copper
Can any of the company-specific risk be diversified away by investing in both Pan American and Ero 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 Pan American and Ero Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pan American Silver and Ero Copper Corp, you can compare the effects of market volatilities on Pan American and Ero 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 Pan American with a short position of Ero Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan American and Ero Copper.
Diversification Opportunities for Pan American and Ero Copper
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pan and Ero is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Pan American Silver and Ero Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ero Copper Corp and Pan American 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 Pan American Silver are associated (or correlated) with Ero Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ero Copper Corp has no effect on the direction of Pan American i.e., Pan American and Ero Copper go up and down completely randomly.
Pair Corralation between Pan American and Ero Copper
Assuming the 90 days trading horizon Pan American Silver is expected to generate 0.9 times more return on investment than Ero Copper. However, Pan American Silver is 1.11 times less risky than Ero Copper. It trades about 0.19 of its potential returns per unit of risk. Ero Copper Corp is currently generating about 0.0 per unit of risk. If you would invest 2,864 in Pan American Silver on December 28, 2024 and sell it today you would earn a total of 919.00 from holding Pan American Silver or generate 32.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Pan American Silver vs. Ero Copper Corp
Performance |
Timeline |
Pan American Silver |
Ero Copper Corp |
Pan American and Ero Copper Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pan American and Ero Copper
The main advantage of trading using opposite Pan American and Ero Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan American position performs unexpectedly, Ero 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 Ero Copper will offset losses from the drop in Ero Copper's long position.Pan American vs. Canaf Investments | Pan American vs. Data Communications Management | Pan American vs. Westshore Terminals Investment | Pan American vs. Partners Value Investments |
Ero Copper vs. SSR Mining | Ero Copper vs. MAG Silver Corp | Ero Copper vs. Torex Gold Resources | Ero Copper vs. Pan American Silver |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |