Correlation Between Vision Lithium and Nickel Creek
Can any of the company-specific risk be diversified away by investing in both Vision Lithium and Nickel Creek 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 Vision Lithium and Nickel Creek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vision Lithium and Nickel Creek Platinum, you can compare the effects of market volatilities on Vision Lithium and Nickel Creek 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 Vision Lithium with a short position of Nickel Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vision Lithium and Nickel Creek.
Diversification Opportunities for Vision Lithium and Nickel Creek
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vision and Nickel is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Vision Lithium and Nickel Creek Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nickel Creek Platinum and Vision Lithium 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 Vision Lithium are associated (or correlated) with Nickel Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nickel Creek Platinum has no effect on the direction of Vision Lithium i.e., Vision Lithium and Nickel Creek go up and down completely randomly.
Pair Corralation between Vision Lithium and Nickel Creek
Assuming the 90 days horizon Vision Lithium is expected to generate 1.96 times less return on investment than Nickel Creek. In addition to that, Vision Lithium is 2.26 times more volatile than Nickel Creek Platinum. It trades about 0.02 of its total potential returns per unit of risk. Nickel Creek Platinum is currently generating about 0.08 per unit of volatility. If you would invest 33.00 in Nickel Creek Platinum on November 5, 2024 and sell it today you would earn a total of 2.00 from holding Nickel Creek Platinum or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Vision Lithium vs. Nickel Creek Platinum
Performance |
| Timeline |
| Vision Lithium |
| Nickel Creek Platinum |
Vision Lithium and Nickel Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vision Lithium and Nickel Creek
The main advantage of trading using opposite Vision Lithium and Nickel Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vision Lithium position performs unexpectedly, Nickel Creek 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 Nickel Creek will offset losses from the drop in Nickel Creek's long position.| Vision Lithium vs. Argosy Minerals Limited | Vision Lithium vs. Aurelia Metals Limited | Vision Lithium vs. Critical Elements | Vision Lithium vs. Artemis Resources |
| Nickel Creek vs. Ridgestone Mining | Nickel Creek vs. Focus Graphite | Nickel Creek vs. Jervois Mining | Nickel Creek vs. Altius Minerals |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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