Correlation Between Trematon Capital and Copper 360

Can any of the company-specific risk be diversified away by investing in both Trematon Capital and Copper 360 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 Trematon Capital and Copper 360 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Trematon Capital Investments and Copper 360, you can compare the effects of market volatilities on Trematon Capital and Copper 360 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 Trematon Capital with a short position of Copper 360. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trematon Capital and Copper 360.

Diversification Opportunities for Trematon Capital and Copper 360

0.46

Correlation Coefficient

Trematon Capital  Copper 360

Very weak diversification

The 3 months correlation between Trematon and Copper is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Trematon Capital Investments and Copper 360 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper 360 and Trematon Capital 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 Trematon Capital Investments are associated (or correlated) with Copper 360. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper 360 has no effect on the direction of Trematon Capital i.e., Trematon Capital and Copper 360 go up and down completely randomly.

Pair Corralation between Trematon Capital and Copper 360

Assuming the 90 days trading horizon Trematon Capital Investments is expected to generate 1.33 times more return on investment than Copper 360. However, Trematon Capital is 1.33 times more volatile than Copper 360. It trades about 0.02 of its potential returns per unit of risk. Copper 360 is currently generating about -0.18 per unit of risk. If you would invest  23,500  in Trematon Capital Investments on October 20, 2024 and sell it today you would lose (100.00) from holding Trematon Capital Investments or give up 0.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Trematon Capital Investments  vs.  Copper 360

Trematon Capital Inv

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Trematon Capital Investments are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Trematon Capital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Copper 360

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Copper 360 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Trematon Capital and Copper 360

The main advantage of trading using opposite Trematon Capital and Copper 360 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trematon Capital position performs unexpectedly, Copper 360 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 Copper 360 will offset losses from the drop in Copper 360's long position.

The idea behind Trematon Capital Investments and Copper 360 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.