Correlation Between Strategic Metals and Surge Copper

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

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

Diversification Opportunities for Strategic Metals and Surge Copper

-0.13

Correlation Coefficient

Strategic Metals  Surge Copper

Good diversification

The 3 months correlation between Strategic and Surge is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Metals and Surge Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge Copper Corp and Strategic Metals 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 Strategic Metals are associated (or correlated) with Surge Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Copper Corp has no effect on the direction of Strategic Metals i.e., Strategic Metals and Surge Copper go up and down completely randomly.

Pair Corralation between Strategic Metals and Surge Copper

Assuming the 90 days horizon Strategic Metals is expected to generate 1.4 times more return on investment than Surge Copper. However, Strategic Metals is 1.4 times more volatile than Surge Copper Corp. It trades about 0.07 of its potential returns per unit of risk. Surge Copper Corp is currently generating about 0.03 per unit of risk. If you would invest  11.00  in Strategic Metals on December 1, 2024 and sell it today you would earn a total of  2.00  from holding Strategic Metals or generate 18.18% return on investment over 90 days.

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

Strategic Metals  vs.  Surge Copper Corp

Strategic Metals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Strategic Metals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Strategic Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Surge Copper Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Surge Copper Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Surge Copper may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Strategic Metals and Surge Copper

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

The idea behind Strategic Metals and Surge 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.