Correlation Between Mindax and Cooper Metals
Can any of the company-specific risk be diversified away by investing in both Mindax and Cooper Metals 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 Mindax and Cooper Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mindax Limited and Cooper Metals, you can compare the effects of market volatilities on Mindax and Cooper Metals 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 Mindax with a short position of Cooper Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mindax and Cooper Metals.
Diversification Opportunities for Mindax and Cooper Metals
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mindax and Cooper is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mindax Limited and Cooper Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Metals and Mindax 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 Mindax Limited are associated (or correlated) with Cooper Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cooper Metals has no effect on the direction of Mindax i.e., Mindax and Cooper Metals go up and down completely randomly.
Pair Corralation between Mindax and Cooper Metals
Assuming the 90 days trading horizon Mindax Limited is expected to generate 0.73 times more return on investment than Cooper Metals. However, Mindax Limited is 1.37 times less risky than Cooper Metals. It trades about -0.02 of its potential returns per unit of risk. Cooper Metals is currently generating about -0.11 per unit of risk. If you would invest 6.20 in Mindax Limited on September 25, 2024 and sell it today you would lose (2.40) from holding Mindax Limited or give up 38.71% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.6% |
Values | Daily Returns |
Mindax Limited vs. Cooper Metals
Performance |
Timeline |
Mindax Limited |
Cooper Metals |
Mindax and Cooper Metals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mindax and Cooper Metals
The main advantage of trading using opposite Mindax and Cooper Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mindax position performs unexpectedly, Cooper Metals 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 Cooper Metals will offset losses from the drop in Cooper Metals' long position.Mindax vs. Northern Star Resources | Mindax vs. Evolution Mining | Mindax vs. Bluescope Steel | Mindax vs. Aneka Tambang Tbk |
Cooper Metals vs. Northern Star Resources | Cooper Metals vs. Evolution Mining | Cooper Metals vs. Bluescope Steel | Cooper Metals vs. Aneka Tambang Tbk |
Check out your portfolio center.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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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