Correlation Between Surge Copper and BCM Resources
Can any of the company-specific risk be diversified away by investing in both Surge Copper and BCM Resources 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 BCM Resources 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 BCM Resources Corp, you can compare the effects of market volatilities on Surge Copper and BCM Resources 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 BCM Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surge Copper and BCM Resources.
Diversification Opportunities for Surge Copper and BCM Resources
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Surge and BCM is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Surge Copper Corp and BCM Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCM Resources Corp 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 BCM Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCM Resources Corp has no effect on the direction of Surge Copper i.e., Surge Copper and BCM Resources go up and down completely randomly.
Pair Corralation between Surge Copper and BCM Resources
Assuming the 90 days trading horizon Surge Copper is expected to generate 9.99 times less return on investment than BCM Resources. But when comparing it to its historical volatility, Surge Copper Corp is 2.08 times less risky than BCM Resources. It trades about 0.03 of its potential returns per unit of risk. BCM Resources Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 4.00 in BCM Resources Corp on December 26, 2024 and sell it today you would earn a total of 6.00 from holding BCM Resources Corp or generate 150.0% 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. BCM Resources Corp
Performance |
Timeline |
Surge Copper Corp |
BCM Resources Corp |
Surge Copper and BCM Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Surge Copper and BCM Resources
The main advantage of trading using opposite Surge Copper and BCM Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surge Copper position performs unexpectedly, BCM Resources 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 BCM Resources will offset losses from the drop in BCM Resources' long position.Surge Copper vs. Kutcho Copper Corp | Surge Copper vs. CANEX Metals | Surge Copper vs. Highland Copper | Surge Copper vs. District Copper Corp |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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