Correlation Between Western Copper and PACCAR
Can any of the company-specific risk be diversified away by investing in both Western Copper and PACCAR 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 Western Copper and PACCAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Copper and and PACCAR Inc, you can compare the effects of market volatilities on Western Copper and PACCAR 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 Western Copper with a short position of PACCAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and PACCAR.
Diversification Opportunities for Western Copper and PACCAR
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and PACCAR is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and PACCAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACCAR Inc and Western 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 Western Copper and are associated (or correlated) with PACCAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACCAR Inc has no effect on the direction of Western Copper i.e., Western Copper and PACCAR go up and down completely randomly.
Pair Corralation between Western Copper and PACCAR
Considering the 90-day investment horizon Western Copper and is expected to generate 1.71 times more return on investment than PACCAR. However, Western Copper is 1.71 times more volatile than PACCAR Inc. It trades about 0.07 of its potential returns per unit of risk. PACCAR Inc is currently generating about -0.04 per unit of risk. If you would invest 104.00 in Western Copper and on December 28, 2024 and sell it today you would earn a total of 11.00 from holding Western Copper and or generate 10.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Western Copper and vs. PACCAR Inc
Performance |
Timeline |
Western Copper |
PACCAR Inc |
Western Copper and PACCAR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Western Copper and PACCAR
The main advantage of trading using opposite Western Copper and PACCAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, PACCAR 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 PACCAR will offset losses from the drop in PACCAR's long position.Western Copper vs. Fury Gold Mines | Western Copper vs. EMX Royalty Corp | Western Copper vs. Nevada King Gold | Western Copper vs. Aftermath Silver |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation |