Correlation Between Surge Copper and Strategic Metals

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

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

Diversification Opportunities for Surge Copper and Strategic Metals

0.01

Correlation Coefficient

Surge Copper  Strategic Metals

Significant diversification

The 3 months correlation between Surge and Strategic is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Surge Copper Corp and Strategic Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Metals and Surge 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 Surge Copper Corp are associated (or correlated) with Strategic Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Metals has no effect on the direction of Surge Copper i.e., Surge Copper and Strategic Metals go up and down completely randomly.

Pair Corralation between Surge Copper and Strategic Metals

Assuming the 90 days horizon Surge Copper Corp is expected to generate 0.86 times more return on investment than Strategic Metals. However, Surge Copper Corp is 1.16 times less risky than Strategic Metals. It trades about 0.12 of its potential returns per unit of risk. Strategic Metals is currently generating about 0.05 per unit of risk. If you would invest  8.00  in Surge Copper Corp on December 30, 2024 and sell it today you would earn a total of  3.00  from holding Surge Copper Corp or generate 37.5% return on investment over 90 days.

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

Surge Copper Corp  vs.  Strategic Metals

Surge Copper Corp

Risk-Adjusted Performance

OK

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

Strategic Metals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Strategic Metals are ranked lower than 4 (%) 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.

Pair Trading with Surge Copper and Strategic Metals

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

The idea behind Surge Copper Corp and Strategic Metals 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.