Correlation Between Freeport McMoran and State Auto
Can any of the company-specific risk be diversified away by investing in both Freeport McMoran and State Auto 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 Freeport McMoran and State Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freeport McMoran Copper Gold and State Auto Financial, you can compare the effects of market volatilities on Freeport McMoran and State Auto 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 Freeport McMoran with a short position of State Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freeport McMoran and State Auto.
Diversification Opportunities for Freeport McMoran and State Auto
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Freeport and State is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Freeport McMoran Copper Gold and State Auto Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Auto Financial and Freeport McMoran 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 Freeport McMoran Copper Gold are associated (or correlated) with State Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Auto Financial has no effect on the direction of Freeport McMoran i.e., Freeport McMoran and State Auto go up and down completely randomly.
Pair Corralation between Freeport McMoran and State Auto
If you would invest 4,522 in Freeport McMoran Copper Gold on January 25, 2024 and sell it today you would earn a total of 277.00 from holding Freeport McMoran Copper Gold or generate 6.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Freeport McMoran Copper Gold vs. State Auto Financial
Performance |
| Timeline |
| Freeport McMoran Copper |
| State Auto Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Freeport McMoran and State Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freeport McMoran and State Auto
The main advantage of trading using opposite Freeport McMoran and State Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freeport McMoran position performs unexpectedly, State Auto 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 State Auto will offset losses from the drop in State Auto's long position.| Freeport McMoran vs. Ero Copper Corp | Freeport McMoran vs. Taseko Mines | Freeport McMoran vs. Metals Acquisition Limited | Freeport McMoran vs. Hecla Mining |
| State Auto vs. Stereo Vision Entertainment | State Auto vs. Levi Strauss Co | State Auto vs. Nike Inc | State Auto vs. Cedar Fair LP |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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