Correlation Between Nuscale Power and Marimaca Copper

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

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

Diversification Opportunities for Nuscale Power and Marimaca Copper

0.49

Correlation Coefficient

Nuscale Power  Marimaca Copper

Very weak diversification

The 3 months correlation between Nuscale and Marimaca is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Nuscale Power Corp and Marimaca Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marimaca Copper Corp and Nuscale Power 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 Nuscale Power Corp are associated (or correlated) with Marimaca Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marimaca Copper Corp has no effect on the direction of Nuscale Power i.e., Nuscale Power and Marimaca Copper go up and down completely randomly.

Pair Corralation between Nuscale Power and Marimaca Copper

Considering the 90-day investment horizon Nuscale Power Corp is expected to generate 3.12 times more return on investment than Marimaca Copper. However, Nuscale Power is 3.12 times more volatile than Marimaca Copper Corp. It trades about 0.15 of its potential returns per unit of risk. Marimaca Copper Corp is currently generating about 0.08 per unit of risk. If you would invest  950.00  in Nuscale Power Corp on October 25, 2024 and sell it today you would earn a total of  1,930  from holding Nuscale Power Corp or generate 203.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.19%
Values	Daily Returns

Nuscale Power Corp  vs.  Marimaca Copper Corp

Nuscale Power Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuscale Power Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent primary indicators, Nuscale Power reported solid returns over the last few months and may actually be approaching a breakup point.

Marimaca Copper Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Marimaca Copper Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward indicators, Marimaca Copper reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nuscale Power and Marimaca Copper

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

The idea behind Nuscale Power Corp and Marimaca 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.