Correlation Between Freeport McMoran and BankInvest Optima
Can any of the company-specific risk be diversified away by investing in both Freeport McMoran and BankInvest Optima 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 BankInvest Optima 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 BankInvest Optima 30, you can compare the effects of market volatilities on Freeport McMoran and BankInvest Optima 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 BankInvest Optima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freeport McMoran and BankInvest Optima.
Diversification Opportunities for Freeport McMoran and BankInvest Optima
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Freeport and BankInvest is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Freeport McMoran Copper Gold and BankInvest Optima 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Optima 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 BankInvest Optima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Optima has no effect on the direction of Freeport McMoran i.e., Freeport McMoran and BankInvest Optima go up and down completely randomly.
Pair Corralation between Freeport McMoran and BankInvest Optima
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 | Moves Together |
Strength | Significant |
Accuracy | 0.0% |
Values | Daily Returns |
Freeport McMoran Copper Gold vs. BankInvest Optima 30
Performance |
Timeline |
Freeport McMoran Copper |
BankInvest Optima |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Freeport McMoran and BankInvest Optima Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Freeport McMoran and BankInvest Optima
The main advantage of trading using opposite Freeport McMoran and BankInvest Optima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freeport McMoran position performs unexpectedly, BankInvest Optima 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 BankInvest Optima will offset losses from the drop in BankInvest Optima's long position.The idea behind Freeport McMoran Copper Gold and BankInvest Optima 30 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.BankInvest Optima vs. Carnegie Wealth Management | BankInvest Optima vs. Ringkjoebing Landbobank AS | BankInvest Optima vs. Strategic Investments AS | BankInvest Optima vs. Scandinavian Tobacco Group |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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