Correlation Between Kopernik Global and Eic Value

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

By analyzing existing cross correlation between Kopernik Global All Cap and Eic Value Fund, you can compare the effects of market volatilities on Kopernik Global and Eic Value 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 Kopernik Global with a short position of Eic Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kopernik Global and Eic Value.

Diversification Opportunities for Kopernik Global and Eic Value

-0.39

Correlation Coefficient

Kopernik Global  Eic Value

Very good diversification

The 3 months correlation between Kopernik and Eic is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Kopernik Global All Cap and Eic Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eic Value Fund and Kopernik 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 Kopernik Global All Cap are associated (or correlated) with Eic Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eic Value Fund has no effect on the direction of Kopernik Global i.e., Kopernik Global and Eic Value go up and down completely randomly.

Pair Corralation between Kopernik Global and Eic Value

Assuming the 90 days horizon Kopernik Global All Cap is expected to under-perform the Eic Value. In addition to that, Kopernik Global is 1.31 times more volatile than Eic Value Fund. It trades about -0.05 of its total potential returns per unit of risk. Eic Value Fund is currently generating about 0.01 per unit of volatility. If you would invest  1,695  in Eic Value Fund on September 18, 2024 and sell it today you would earn a total of  7.00  from holding Eic Value Fund or generate 0.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Kopernik Global All Cap  vs.  Eic Value Fund

Kopernik Global All

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kopernik Global All Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Kopernik Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eic Value Fund

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eic Value Fund are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Eic Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kopernik Global and Eic Value

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

The idea behind Kopernik Global All Cap and Eic Value Fund 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.