Correlation Between Marimaca Copper and Pentair PLC

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

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

Diversification Opportunities for Marimaca Copper and Pentair PLC

0.22

Correlation Coefficient

Marimaca Copper  Pentair PLC

Modest diversification

The 3 months correlation between Marimaca and Pentair is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Marimaca Copper Corp and Pentair PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pentair PLC and Marimaca 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 Marimaca Copper Corp are associated (or correlated) with Pentair PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pentair PLC has no effect on the direction of Marimaca Copper i.e., Marimaca Copper and Pentair PLC go up and down completely randomly.

Pair Corralation between Marimaca Copper and Pentair PLC

If you would invest  235.00  in Marimaca Copper Corp on February 5, 2024 and sell it today you would earn a total of  0.00  from holding Marimaca Copper Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

Marimaca Copper Corp  vs.  Pentair PLC

Marimaca Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marimaca Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking indicators, Marimaca Copper is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pentair PLC

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pentair PLC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Pentair PLC may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Marimaca Copper and Pentair PLC

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

The idea behind Marimaca Copper Corp and Pentair PLC 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.