Correlation Between Aurubis AG and Southern Copper

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Can any of the company-specific risk be diversified away by investing in both Aurubis AG and Southern 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 Aurubis AG and Southern Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurubis AG and Southern Copper, you can compare the effects of market volatilities on Aurubis AG and Southern 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 Aurubis AG with a short position of Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurubis AG and Southern Copper.

Diversification Opportunities for Aurubis AG and Southern Copper

0.78
  Correlation Coefficient

Poor diversification

The 3 months correlation between Aurubis and Southern is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Aurubis AG and Southern Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper and Aurubis AG 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 Aurubis AG are associated (or correlated) with Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper has no effect on the direction of Aurubis AG i.e., Aurubis AG and Southern Copper go up and down completely randomly.

Pair Corralation between Aurubis AG and Southern Copper

Assuming the 90 days horizon Aurubis AG is expected to generate 0.87 times more return on investment than Southern Copper. However, Aurubis AG is 1.14 times less risky than Southern Copper. It trades about 0.29 of its potential returns per unit of risk. Southern Copper is currently generating about 0.06 per unit of risk. If you would invest  8,030  in Aurubis AG on April 22, 2025 and sell it today you would earn a total of  1,045  from holding Aurubis AG or generate 13.01% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Aurubis AG  vs.  Southern Copper

 Performance 
       Timeline  
Aurubis AG 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Aurubis AG are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Aurubis AG reported solid returns over the last few months and may actually be approaching a breakup point.
Southern Copper 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Southern Copper are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Southern Copper may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Aurubis AG and Southern Copper Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aurubis AG and Southern Copper

The main advantage of trading using opposite Aurubis AG and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurubis AG position performs unexpectedly, Southern 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 Southern Copper will offset losses from the drop in Southern Copper's long position.
The idea behind Aurubis AG and Southern Copper 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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