Correlation Between PJX Resources and Chakana Copper

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

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

Diversification Opportunities for PJX Resources and Chakana Copper

0.56

Correlation Coefficient

PJX Resources  Chakana Copper

Very weak diversification

The 3 months correlation between PJX and Chakana is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding PJX Resources and Chakana Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chakana Copper Corp and PJX Resources 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 PJX Resources are associated (or correlated) with Chakana Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chakana Copper Corp has no effect on the direction of PJX Resources i.e., PJX Resources and Chakana Copper go up and down completely randomly.

Pair Corralation between PJX Resources and Chakana Copper

Assuming the 90 days horizon PJX Resources is expected to generate 0.74 times more return on investment than Chakana Copper. However, PJX Resources is 1.35 times less risky than Chakana Copper. It trades about 0.12 of its potential returns per unit of risk. Chakana Copper Corp is currently generating about 0.06 per unit of risk. If you would invest  9.50  in PJX Resources on September 24, 2024 and sell it today you would earn a total of  1.50  from holding PJX Resources or generate 15.79% return on investment over 90 days.

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

PJX Resources  vs.  Chakana Copper Corp

PJX Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PJX Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Chakana Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with PJX Resources and Chakana Copper

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

The idea behind PJX Resources and Chakana 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.