Correlation Between Copperbank Resources and Copper Mountain

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

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

Diversification Opportunities for Copperbank Resources and Copper Mountain

0.02

Correlation Coefficient

Copperbank Resources  Copper Mountain

Significant diversification

The 3 months correlation between Copperbank and Copper is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Copperbank Resources Corp and Copper Mountain Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper Mountain Mining and Copperbank 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 Copperbank Resources Corp are associated (or correlated) with Copper Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper Mountain Mining has no effect on the direction of Copperbank Resources i.e., Copperbank Resources and Copper Mountain go up and down completely randomly.

Pair Corralation between Copperbank Resources and Copper Mountain

Assuming the 90 days horizon Copperbank Resources Corp is expected to generate 0.32 times more return on investment than Copper Mountain. However, Copperbank Resources Corp is 3.08 times less risky than Copper Mountain. It trades about 0.09 of its potential returns per unit of risk. Copper Mountain Mining is currently generating about -0.01 per unit of risk. If you would invest  54.00  in Copperbank Resources Corp on September 3, 2024 and sell it today you would earn a total of  7.00  from holding Copperbank Resources Corp or generate 12.96% return on investment over 90 days.

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

Copperbank Resources Corp  vs.  Copper Mountain Mining

Copperbank Resources Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Copperbank Resources Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, Copperbank Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Copper Mountain Mining

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Copperbank Resources and Copper Mountain

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

The idea behind Copperbank Resources Corp and Copper Mountain Mining 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.