Correlation Between Marimaca Copper and Valhi

Can any of the company-specific risk be diversified away by investing in both Marimaca Copper and Valhi 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 Valhi 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 Valhi Inc, you can compare the effects of market volatilities on Marimaca Copper and Valhi 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 Valhi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marimaca Copper and Valhi.

Diversification Opportunities for Marimaca Copper and Valhi

0.39

Correlation Coefficient

Marimaca Copper  Valhi

Weak diversification

The 3 months correlation between Marimaca and Valhi is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Marimaca Copper Corp and Valhi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valhi Inc 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 Valhi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valhi Inc has no effect on the direction of Marimaca Copper i.e., Marimaca Copper and Valhi go up and down completely randomly.

Pair Corralation between Marimaca Copper and Valhi

If you would invest  235.00  in Marimaca Copper Corp on February 3, 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.  Valhi Inc

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

Valhi Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Valhi Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Valhi demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marimaca Copper and Valhi

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

The idea behind Marimaca Copper Corp and Valhi Inc 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.