Correlation Between Mast Global and IShares Copper

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

By analyzing existing cross correlation between Mast Global Battery and iShares Copper and, you can compare the effects of market volatilities on Mast Global and IShares 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 Mast Global with a short position of IShares Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mast Global and IShares Copper.

Diversification Opportunities for Mast Global and IShares Copper

0.76

Correlation Coefficient

Mast Global  IShares Copper

Poor diversification

The 3 months correlation between Mast and IShares is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Mast Global Battery and iShares Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Copper and Mast Global 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 Mast Global Battery are associated (or correlated) with IShares Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Copper has no effect on the direction of Mast Global i.e., Mast Global and IShares Copper go up and down completely randomly.

Pair Corralation between Mast Global and IShares Copper

Allowing for the 90-day total investment horizon Mast Global Battery is expected to generate 0.9 times more return on investment than IShares Copper. However, Mast Global Battery is 1.11 times less risky than IShares Copper. It trades about 0.1 of its potential returns per unit of risk. iShares Copper and is currently generating about 0.05 per unit of risk. If you would invest  2,277  in Mast Global Battery on September 2, 2024 and sell it today you would earn a total of  243.00  from holding Mast Global Battery or generate 10.67% return on investment over 90 days.

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

Mast Global Battery  vs.  iShares Copper and

Mast Global Battery

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mast Global Battery are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Mast Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

iShares Copper

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Copper and are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, IShares Copper is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Mast Global and IShares Copper

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

The idea behind Mast Global Battery and iShares Copper and 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.