Correlation Between Tree Island and Surge Copper
Can any of the company-specific risk be diversified away by investing in both Tree Island and Surge Copper 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 Tree Island and Surge Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tree Island Steel and Surge Copper Corp, you can compare the effects of market volatilities on Tree Island and Surge Copper 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 Tree Island with a short position of Surge Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tree Island and Surge Copper.
Diversification Opportunities for Tree Island and Surge Copper
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tree and Surge is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Tree Island Steel and Surge Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge Copper Corp and Tree Island 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 Tree Island Steel are associated (or correlated) with Surge Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Copper Corp has no effect on the direction of Tree Island i.e., Tree Island and Surge Copper go up and down completely randomly.
Pair Corralation between Tree Island and Surge Copper
Assuming the 90 days trading horizon Tree Island is expected to generate 10.0 times less return on investment than Surge Copper. But when comparing it to its historical volatility, Tree Island Steel is 4.97 times less risky than Surge Copper. It trades about 0.07 of its potential returns per unit of risk. Surge Copper Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Surge Copper Corp on August 19, 2025 and sell it today you would earn a total of 18.00 from holding Surge Copper Corp or generate 163.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tree Island Steel vs. Surge Copper Corp
Performance |
| Timeline |
| Tree Island Steel |
| Surge Copper Corp |
Tree Island and Surge Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tree Island and Surge Copper
The main advantage of trading using opposite Tree Island and Surge Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tree Island position performs unexpectedly, Surge Copper 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 Surge Copper will offset losses from the drop in Surge Copper's long position.| Tree Island vs. Surge Copper Corp | Tree Island vs. Defiance Silver Corp | Tree Island vs. Canterra Minerals | Tree Island vs. NevGold Corp |
| Surge Copper vs. Surge Battery Metals | Surge Copper vs. Solitario Exploration Royalty | Surge Copper vs. RTG Mining | Surge Copper vs. HPQ Silicon Resources |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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