Correlation Between Benton Resources and Kutcho Copper

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

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

Diversification Opportunities for Benton Resources and Kutcho Copper

0.22

Correlation Coefficient

Benton Resources  Kutcho Copper

Modest diversification

The 3 months correlation between Benton and Kutcho is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Benton Resources and Kutcho Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kutcho Copper Corp and Benton Resources 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 Benton Resources are associated (or correlated) with Kutcho Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kutcho Copper Corp has no effect on the direction of Benton Resources i.e., Benton Resources and Kutcho Copper go up and down completely randomly.

Pair Corralation between Benton Resources and Kutcho Copper

Assuming the 90 days horizon Benton Resources is expected to generate 2.53 times more return on investment than Kutcho Copper. However, Benton Resources is 2.53 times more volatile than Kutcho Copper Corp. It trades about 0.06 of its potential returns per unit of risk. Kutcho Copper Corp is currently generating about -0.01 per unit of risk. If you would invest  5.90  in Benton Resources on September 13, 2024 and sell it today you would lose (0.90) from holding Benton Resources or give up 15.25% of portfolio value over 90 days.

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

Benton Resources  vs.  Kutcho Copper Corp

Benton Resources

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Benton Resources are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Benton Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Kutcho Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Benton Resources and Kutcho Copper

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

The idea behind Benton Resources and Kutcho 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.