Correlation Between Freeport McMoran and Sharp

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

Diversification Opportunities for Freeport McMoran and Sharp

-0.79

Correlation Coefficient

Freeport McMoran  Sharp

Pay attention - limited upside

The 3 months correlation between Freeport and Sharp is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Freeport McMoran Copper Gold and Sharp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharp 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 Sharp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharp has no effect on the direction of Freeport McMoran i.e., Freeport McMoran and Sharp go up and down completely randomly.

Pair Corralation between Freeport McMoran and Sharp

Considering the 90-day investment horizon Freeport McMoran Copper Gold is expected to generate 1.12 times more return on investment than Sharp. However, Freeport McMoran is 1.12 times more volatile than Sharp. It trades about 0.06 of its potential returns per unit of risk. Sharp is currently generating about -0.16 per unit of risk. If you would invest  3,629  in Freeport McMoran Copper Gold on May 1, 2025 and sell it today you would earn a total of  285.00  from holding Freeport McMoran Copper Gold or generate 7.85% return on investment over 90 days.

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

Freeport McMoran Copper Gold  vs.  Sharp

Freeport McMoran Copper

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Freeport McMoran Copper Gold are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, Freeport McMoran may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Sharp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sharp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Freeport McMoran and Sharp

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

The idea behind Freeport McMoran Copper Gold and Sharp 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.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..