Correlation Between Cascadero Copper and Sky Century

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

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

Diversification Opportunities for Cascadero Copper and Sky Century

0.2

Correlation Coefficient

Cascadero Copper  Sky Century

Modest diversification

The 3 months correlation between Cascadero and Sky is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Cascadero Copper and Sky Century Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sky Century Investment and Cascadero 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 Cascadero Copper are associated (or correlated) with Sky Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sky Century Investment has no effect on the direction of Cascadero Copper i.e., Cascadero Copper and Sky Century go up and down completely randomly.

Pair Corralation between Cascadero Copper and Sky Century

Assuming the 90 days horizon Cascadero Copper is expected to generate 2.09 times more return on investment than Sky Century. However, Cascadero Copper is 2.09 times more volatile than Sky Century Investment. It trades about 0.22 of its potential returns per unit of risk. Sky Century Investment is currently generating about 0.15 per unit of risk. If you would invest  0.23  in Cascadero Copper on September 14, 2024 and sell it today you would earn a total of  0.52  from holding Cascadero Copper or generate 226.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	91.3%
Values	Daily Returns

Cascadero Copper  vs.  Sky Century Investment

Cascadero Copper

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cascadero Copper are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Cascadero Copper reported solid returns over the last few months and may actually be approaching a breakup point.

Sky Century Investment

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sky Century Investment are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Sky Century demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cascadero Copper and Sky Century

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

The idea behind Cascadero Copper and Sky Century Investment 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.