Correlation Between Western Copper and 70082LAB3

Can any of the company-specific risk be diversified away by investing in both Western Copper and 70082LAB3 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 70082LAB3 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 US70082LAB36, you can compare the effects of market volatilities on Western Copper and 70082LAB3 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 70082LAB3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and 70082LAB3.

Diversification Opportunities for Western Copper and 70082LAB3

-0.29

Correlation Coefficient

Western Copper  70082LAB3

Very good diversification

The 3 months correlation between Western and 70082LAB3 is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and US70082LAB36 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US70082LAB36 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 70082LAB3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US70082LAB36 has no effect on the direction of Western Copper i.e., Western Copper and 70082LAB3 go up and down completely randomly.

Pair Corralation between Western Copper and 70082LAB3

Considering the 90-day investment horizon Western Copper and is expected to generate 0.83 times more return on investment than 70082LAB3. However, Western Copper and is 1.2 times less risky than 70082LAB3. It trades about 0.11 of its potential returns per unit of risk. US70082LAB36 is currently generating about -0.17 per unit of risk. If you would invest  101.00  in Western Copper and on December 25, 2024 and sell it today you would earn a total of  18.50  from holding Western Copper and or generate 18.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	61.67%
Values	Daily Returns

Western Copper and  vs.  US70082LAB36

Western Copper

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Western Copper and are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Western Copper displayed solid returns over the last few months and may actually be approaching a breakup point.

US70082LAB36

Risk-Adjusted Performance

Very Weak

Over the last 90 days US70082LAB36 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for US70082LAB36 investors.

Pair Trading with Western Copper and 70082LAB3

The main advantage of trading using opposite Western Copper and 70082LAB3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, 70082LAB3 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 70082LAB3 will offset losses from the drop in 70082LAB3's long position.

The idea behind Western Copper and and US70082LAB36 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.