Correlation Between Equity Metals and Copaur Minerals

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

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

Diversification Opportunities for Equity Metals and Copaur Minerals

-0.11

Correlation Coefficient

Equity Metals  Copaur Minerals

Good diversification

The 3 months correlation between Equity and Copaur is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Equity Metals Corp and Copaur Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copaur Minerals and Equity Metals 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 Equity Metals Corp are associated (or correlated) with Copaur Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copaur Minerals has no effect on the direction of Equity Metals i.e., Equity Metals and Copaur Minerals go up and down completely randomly.

Pair Corralation between Equity Metals and Copaur Minerals

Assuming the 90 days trading horizon Equity Metals Corp is expected to generate 0.99 times more return on investment than Copaur Minerals. However, Equity Metals Corp is 1.01 times less risky than Copaur Minerals. It trades about 0.12 of its potential returns per unit of risk. Copaur Minerals is currently generating about -0.01 per unit of risk. If you would invest  21.00  in Equity Metals Corp on April 24, 2025 and sell it today you would earn a total of  9.00  from holding Equity Metals Corp or generate 42.86% return on investment over 90 days.

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

Equity Metals Corp  vs.  Copaur Minerals

Equity Metals Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Equity Metals Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Equity Metals showed solid returns over the last few months and may actually be approaching a breakup point.

Copaur Minerals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Copaur Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Copaur Minerals 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 Equity Metals and Copaur Minerals

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

The idea behind Equity Metals Corp and Copaur Minerals 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.