Correlation Between INTERNATIONAL and Copperbank Resources

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

By analyzing existing cross correlation between INTERNATIONAL FLAVORS FRAGRANCES and Copperbank Resources Corp, you can compare the effects of market volatilities on INTERNATIONAL and Copperbank 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 INTERNATIONAL with a short position of Copperbank Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERNATIONAL and Copperbank Resources.

Diversification Opportunities for INTERNATIONAL and Copperbank Resources

0.16

Correlation Coefficient

INTERNATIONAL  Copperbank Resources

Average diversification

The 3 months correlation between INTERNATIONAL and Copperbank is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding INTERNATIONAL FLAVORS FRAGRANC and Copperbank Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copperbank Resources Corp and INTERNATIONAL 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 INTERNATIONAL FLAVORS FRAGRANCES are associated (or correlated) with Copperbank Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copperbank Resources Corp has no effect on the direction of INTERNATIONAL i.e., INTERNATIONAL and Copperbank Resources go up and down completely randomly.

Pair Corralation between INTERNATIONAL and Copperbank Resources

Assuming the 90 days trading horizon INTERNATIONAL FLAVORS FRAGRANCES is expected to under-perform the Copperbank Resources. But the bond apears to be less risky and, when comparing its historical volatility, INTERNATIONAL FLAVORS FRAGRANCES is 3.12 times less risky than Copperbank Resources. The bond trades about -0.1 of its potential returns per unit of risk. The Copperbank Resources Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  52.00  in Copperbank Resources Corp on December 28, 2024 and sell it today you would earn a total of  11.00  from holding Copperbank Resources Corp or generate 21.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

INTERNATIONAL FLAVORS FRAGRANC  vs.  Copperbank Resources Corp

INTERNATIONAL FLAVORS

Risk-Adjusted Performance

Very Weak

Over the last 90 days INTERNATIONAL FLAVORS FRAGRANCES has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INTERNATIONAL is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Copperbank Resources Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Copperbank Resources Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, Copperbank Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with INTERNATIONAL and Copperbank Resources

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

The idea behind INTERNATIONAL FLAVORS FRAGRANCES and Copperbank Resources 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.