Correlation Between Antofagasta PLC and Ero Copper

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

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

Diversification Opportunities for Antofagasta PLC and Ero Copper

0.83

Correlation Coefficient

Antofagasta PLC  Ero Copper

Very poor diversification

The 3 months correlation between Antofagasta and Ero is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Antofagasta PLC and Ero Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ero Copper Corp and Antofagasta PLC 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 Antofagasta PLC are associated (or correlated) with Ero Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ero Copper Corp has no effect on the direction of Antofagasta PLC i.e., Antofagasta PLC and Ero Copper go up and down completely randomly.

Pair Corralation between Antofagasta PLC and Ero Copper

Assuming the 90 days horizon Antofagasta PLC is expected to generate 1.1 times more return on investment than Ero Copper. However, Antofagasta PLC is 1.1 times more volatile than Ero Copper Corp. It trades about -0.01 of its potential returns per unit of risk. Ero Copper Corp is currently generating about -0.19 per unit of risk. If you would invest  2,310  in Antofagasta PLC on September 15, 2024 and sell it today you would lose (99.00) from holding Antofagasta PLC or give up 4.29% of portfolio value over 90 days.

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

Antofagasta PLC  vs.  Ero Copper Corp

Antofagasta PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Antofagasta PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Antofagasta PLC is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Ero Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ero Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with Antofagasta PLC and Ero Copper

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

The idea behind Antofagasta PLC and Ero Copper Corp 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.