Correlation Between Western Copper and Service Properties

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

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

Diversification Opportunities for Western Copper and Service Properties

0.56

Correlation Coefficient

Western Copper  Service Properties

Very weak diversification

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

Pair Corralation between Western Copper and Service Properties

Assuming the 90 days trading horizon Western Copper is expected to generate 4.05 times less return on investment than Service Properties. In addition to that, Western Copper is 1.06 times more volatile than Service Properties Trust. It trades about 0.04 of its total potential returns per unit of risk. Service Properties Trust is currently generating about 0.19 per unit of volatility. If you would invest  158.00  in Service Properties Trust on April 20, 2025 and sell it today you would earn a total of  66.00  from holding Service Properties Trust or generate 41.77% return on investment over 90 days.

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

Western Copper and  vs.  Service Properties Trust

Western Copper

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Western Copper and are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Western Copper may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Service Properties Trust

Risk-Adjusted Performance

Good

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

Pair Trading with Western Copper and Service Properties

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

The idea behind Western Copper and and Service Properties Trust 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.