Correlation Between World Copper and Gungnir Resources

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

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

Diversification Opportunities for World Copper and Gungnir Resources

0.59

Correlation Coefficient

World Copper  Gungnir Resources

Very weak diversification

The 3 months correlation between World and Gungnir is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding World Copper and Gungnir Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gungnir Resources and World 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 World Copper are associated (or correlated) with Gungnir Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gungnir Resources has no effect on the direction of World Copper i.e., World Copper and Gungnir Resources go up and down completely randomly.

Pair Corralation between World Copper and Gungnir Resources

Assuming the 90 days horizon World Copper is expected to under-perform the Gungnir Resources. But the stock apears to be less risky and, when comparing its historical volatility, World Copper is 2.95 times less risky than Gungnir Resources. The stock trades about -0.09 of its potential returns per unit of risk. The Gungnir Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Gungnir Resources on October 20, 2024 and sell it today you would lose (1.00) from holding Gungnir Resources or give up 33.33% of portfolio value over 90 days.

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

World Copper  vs.  Gungnir Resources

World Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days World Copper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Gungnir Resources

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gungnir Resources are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Gungnir Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with World Copper and Gungnir Resources

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

The idea behind World Copper and Gungnir Resources 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 Anywhere module to track or share privately all of your investments from the convenience of any device.