Correlation Between Kutcho Copper and Volt Lithium

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

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

Diversification Opportunities for Kutcho Copper and Volt Lithium

0.67

Correlation Coefficient

Kutcho Copper  Volt Lithium

Poor diversification

The 3 months correlation between Kutcho and Volt is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Kutcho Copper Corp and Volt Lithium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volt Lithium Corp and Kutcho 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 Kutcho Copper Corp are associated (or correlated) with Volt Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volt Lithium Corp has no effect on the direction of Kutcho Copper i.e., Kutcho Copper and Volt Lithium go up and down completely randomly.

Pair Corralation between Kutcho Copper and Volt Lithium

Assuming the 90 days horizon Kutcho Copper Corp is expected to under-perform the Volt Lithium. In addition to that, Kutcho Copper is 1.01 times more volatile than Volt Lithium Corp. It trades about -0.24 of its total potential returns per unit of risk. Volt Lithium Corp is currently generating about -0.13 per unit of volatility. If you would invest  25.00  in Volt Lithium Corp on September 12, 2024 and sell it today you would lose (3.00) from holding Volt Lithium Corp or give up 12.0% of portfolio value over 90 days.

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

Kutcho Copper Corp  vs.  Volt Lithium Corp

Kutcho Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Volt Lithium Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Volt Lithium Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Kutcho Copper and Volt Lithium

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

The idea behind Kutcho Copper Corp and Volt Lithium 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.