Correlation Between Western Copper and 191216CY4

Can any of the company-specific risk be diversified away by investing in both Western Copper and 191216CY4 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 191216CY4 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 COCA COLA CO, you can compare the effects of market volatilities on Western Copper and 191216CY4 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 191216CY4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and 191216CY4.

Diversification Opportunities for Western Copper and 191216CY4

0.37

Correlation Coefficient

Western Copper  191216CY4

Weak diversification

The 3 months correlation between Western and 191216CY4 is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and COCA COLA CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COCA A CO 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 191216CY4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COCA A CO has no effect on the direction of Western Copper i.e., Western Copper and 191216CY4 go up and down completely randomly.

Pair Corralation between Western Copper and 191216CY4

Considering the 90-day investment horizon Western Copper is expected to generate 15.75 times less return on investment than 191216CY4. But when comparing it to its historical volatility, Western Copper and is 1.04 times less risky than 191216CY4. It trades about 0.01 of its potential returns per unit of risk. COCA COLA CO is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  5,922  in COCA COLA CO on October 26, 2024 and sell it today you would earn a total of  622.00  from holding COCA COLA CO or generate 10.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	88.89%
Values	Daily Returns

Western Copper and  vs.  COCA COLA CO

Western Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Copper and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

COCA A CO

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in COCA COLA CO are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, 191216CY4 may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Western Copper and 191216CY4

The main advantage of trading using opposite Western Copper and 191216CY4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, 191216CY4 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 191216CY4 will offset losses from the drop in 191216CY4's long position.

The idea behind Western Copper and and COCA COLA CO 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.