Correlation Between Chakana Copper and Ophir Gold

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

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

Diversification Opportunities for Chakana Copper and Ophir Gold

-0.02

Correlation Coefficient

Chakana Copper  Ophir Gold

Good diversification

The 3 months correlation between Chakana and Ophir is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Chakana Copper Corp and Ophir Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ophir Gold Corp and Chakana 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 Chakana Copper Corp are associated (or correlated) with Ophir Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ophir Gold Corp has no effect on the direction of Chakana Copper i.e., Chakana Copper and Ophir Gold go up and down completely randomly.

Pair Corralation between Chakana Copper and Ophir Gold

Assuming the 90 days trading horizon Chakana Copper Corp is expected to under-perform the Ophir Gold. In addition to that, Chakana Copper is 1.46 times more volatile than Ophir Gold Corp. It trades about -0.12 of its total potential returns per unit of risk. Ophir Gold Corp is currently generating about 0.12 per unit of volatility. If you would invest  8.00  in Ophir Gold Corp on October 11, 2024 and sell it today you would earn a total of  1.00  from holding Ophir Gold Corp or generate 12.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Chakana Copper Corp  vs.  Ophir Gold Corp

Chakana Copper Corp

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Chakana Copper Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Chakana Copper showed solid returns over the last few months and may actually be approaching a breakup point.

Ophir Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Chakana Copper and Ophir Gold

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

The idea behind Chakana Copper Corp and Ophir 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.