Correlation Between Chia and WESTERN COPPER

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

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

Diversification Opportunities for Chia and WESTERN COPPER

-0.23

Correlation Coefficient

Chia  WESTERN COPPER

Very good diversification

The 3 months correlation between Chia and WESTERN is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Chia and WESTERN PER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WESTERN COPPER and Chia 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 Chia are associated (or correlated) with WESTERN COPPER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WESTERN COPPER has no effect on the direction of Chia i.e., Chia and WESTERN COPPER go up and down completely randomly.

Pair Corralation between Chia and WESTERN COPPER

Assuming the 90 days trading horizon Chia is expected to under-perform the WESTERN COPPER. In addition to that, Chia is 2.08 times more volatile than WESTERN PER. It trades about -0.01 of its total potential returns per unit of risk. WESTERN PER is currently generating about -0.02 per unit of volatility. If you would invest  146.00  in WESTERN PER on October 24, 2024 and sell it today you would lose (49.00) from holding WESTERN PER or give up 33.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	50.96%
Values	Daily Returns

Chia  vs.  WESTERN PER

Chia

Risk-Adjusted Performance

8 of 100

OK

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

WESTERN COPPER

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WESTERN PER has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Chia and WESTERN COPPER

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

The idea behind Chia and WESTERN PER 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.