Correlation Between Copeland Risk and Copeland International

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

By analyzing existing cross correlation between Copeland Risk Managed and Copeland International Small, you can compare the effects of market volatilities on Copeland Risk and Copeland International 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 Copeland Risk with a short position of Copeland International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copeland Risk and Copeland International.

Diversification Opportunities for Copeland Risk and Copeland International

-0.15

Correlation Coefficient

Copeland Risk  Copeland International

Good diversification

The 3 months correlation between Copeland and Copeland is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Copeland Risk Managed and Copeland International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copeland International and Copeland Risk 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 Copeland Risk Managed are associated (or correlated) with Copeland International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copeland International has no effect on the direction of Copeland Risk i.e., Copeland Risk and Copeland International go up and down completely randomly.

Pair Corralation between Copeland Risk and Copeland International

Assuming the 90 days horizon Copeland Risk Managed is expected to under-perform the Copeland International. In addition to that, Copeland Risk is 2.02 times more volatile than Copeland International Small. It trades about -0.07 of its total potential returns per unit of risk. Copeland International Small is currently generating about -0.12 per unit of volatility. If you would invest  844.00  in Copeland International Small on September 13, 2024 and sell it today you would lose (55.00) from holding Copeland International Small or give up 6.52% of portfolio value over 90 days.

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

Copeland Risk Managed  vs.  Copeland International Small

Copeland Risk Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Copeland Risk Managed has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Copeland International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Copeland International Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Copeland Risk and Copeland International

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

The idea behind Copeland Risk Managed and Copeland International Small 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.