Correlation Between Kutcho Copper and Etruscus Resources

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

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

Diversification Opportunities for Kutcho Copper and Etruscus Resources

0.12

Correlation Coefficient

Kutcho Copper  Etruscus Resources

Average diversification

The 3 months correlation between Kutcho and Etruscus is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Kutcho Copper Corp and Etruscus Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etruscus Resources Corp and Kutcho 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 Kutcho Copper Corp are associated (or correlated) with Etruscus Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etruscus Resources Corp has no effect on the direction of Kutcho Copper i.e., Kutcho Copper and Etruscus Resources go up and down completely randomly.

Pair Corralation between Kutcho Copper and Etruscus Resources

Assuming the 90 days horizon Kutcho Copper Corp is expected to under-perform the Etruscus Resources. But the otc stock apears to be less risky and, when comparing its historical volatility, Kutcho Copper Corp is 1.48 times less risky than Etruscus Resources. The otc stock trades about -0.19 of its potential returns per unit of risk. The Etruscus Resources Corp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  5.18  in Etruscus Resources Corp on March 21, 2024 and sell it today you would earn a total of  2.35  from holding Etruscus Resources Corp or generate 45.37% return on investment over 90 days.

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

Kutcho Copper Corp  vs.  Etruscus Resources Corp

Kutcho Copper Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kutcho Copper Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Kutcho Copper reported solid returns over the last few months and may actually be approaching a breakup point.

Etruscus Resources Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Etruscus Resources Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Etruscus Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kutcho Copper and Etruscus Resources

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

The idea behind Kutcho Copper Corp and Etruscus Resources Corp 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.