Correlation Between Insteel Industries and Copperbank Resources

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

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

Diversification Opportunities for Insteel Industries and Copperbank Resources

0.48

Correlation Coefficient

Insteel Industries  Copperbank Resources

Very weak diversification

The 3 months correlation between Insteel and Copperbank is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Insteel Industries and Copperbank Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copperbank Resources Corp and Insteel Industries 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 Insteel Industries are associated (or correlated) with Copperbank Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copperbank Resources Corp has no effect on the direction of Insteel Industries i.e., Insteel Industries and Copperbank Resources go up and down completely randomly.

Pair Corralation between Insteel Industries and Copperbank Resources

Given the investment horizon of 90 days Insteel Industries is expected to generate 6.66 times less return on investment than Copperbank Resources. But when comparing it to its historical volatility, Insteel Industries is 1.87 times less risky than Copperbank Resources. It trades about 0.05 of its potential returns per unit of risk. Copperbank Resources Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  60.00  in Copperbank Resources Corp on May 7, 2025 and sell it today you would earn a total of  21.00  from holding Copperbank Resources Corp or generate 35.0% return on investment over 90 days.

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

Insteel Industries  vs.  Copperbank Resources Corp

Insteel Industries

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Insteel Industries are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Insteel Industries is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Copperbank Resources Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Copperbank Resources Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, Copperbank Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Insteel Industries and Copperbank Resources

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

The idea behind Insteel Industries and Copperbank 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.