Correlation Between International Zeolite and Kodiak Copper

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

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

Diversification Opportunities for International Zeolite and Kodiak Copper

0.62

Correlation Coefficient

International Zeolite  Kodiak Copper

Poor diversification

The 3 months correlation between International and Kodiak is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding International Zeolite Corp and Kodiak Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kodiak Copper Corp and International Zeolite 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 International Zeolite Corp are associated (or correlated) with Kodiak Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kodiak Copper Corp has no effect on the direction of International Zeolite i.e., International Zeolite and Kodiak Copper go up and down completely randomly.

Pair Corralation between International Zeolite and Kodiak Copper

Given the investment horizon of 90 days International Zeolite Corp is expected to generate 3.03 times more return on investment than Kodiak Copper. However, International Zeolite is 3.03 times more volatile than Kodiak Copper Corp. It trades about 0.0 of its potential returns per unit of risk. Kodiak Copper Corp is currently generating about -0.04 per unit of risk. If you would invest  3.50  in International Zeolite Corp on September 12, 2024 and sell it today you would lose (1.00) from holding International Zeolite Corp or give up 28.57% of portfolio value over 90 days.

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

International Zeolite Corp  vs.  Kodiak Copper Corp

International Zeolite

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Zeolite Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, International Zeolite is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Kodiak Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kodiak Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with International Zeolite and Kodiak Copper

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

The idea behind International Zeolite Corp and Kodiak 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 CEOs Directory module to screen CEOs from public companies around the world.