Correlation Between Copper Fox and Trigon Metals

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

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

Diversification Opportunities for Copper Fox and Trigon Metals

0.01

Correlation Coefficient

Copper Fox  Trigon Metals

Significant diversification

The 3 months correlation between Copper and Trigon is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Copper Fox Metals and Trigon Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trigon Metals and Copper Fox 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 Copper Fox Metals are associated (or correlated) with Trigon Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trigon Metals has no effect on the direction of Copper Fox i.e., Copper Fox and Trigon Metals go up and down completely randomly.

Pair Corralation between Copper Fox and Trigon Metals

Assuming the 90 days horizon Copper Fox Metals is expected to generate 3.91 times more return on investment than Trigon Metals. However, Copper Fox is 3.91 times more volatile than Trigon Metals. It trades about 0.24 of its potential returns per unit of risk. Trigon Metals is currently generating about 0.18 per unit of risk. If you would invest  17.00  in Copper Fox Metals on February 21, 2024 and sell it today you would earn a total of  15.00  from holding Copper Fox Metals or generate 88.24% return on investment over 90 days.

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

Copper Fox Metals  vs.  Trigon Metals

Copper Fox Metals

Risk-Adjusted Performance

14 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Copper Fox Metals are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Copper Fox reported solid returns over the last few months and may actually be approaching a breakup point.

Trigon Metals

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Trigon Metals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Trigon Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Copper Fox and Trigon Metals

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

The idea behind Copper Fox Metals and Trigon Metals 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 Commodity Directory module to find actively traded commodities issued by global exchanges.