Correlation Between Aldebaran Resources and SPC Nickel
Can any of the company-specific risk be diversified away by investing in both Aldebaran Resources and SPC Nickel 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 Aldebaran Resources and SPC Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aldebaran Resources and SPC Nickel Corp, you can compare the effects of market volatilities on Aldebaran Resources and SPC Nickel 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 Aldebaran Resources with a short position of SPC Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldebaran Resources and SPC Nickel.
Diversification Opportunities for Aldebaran Resources and SPC Nickel
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aldebaran and SPC is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Aldebaran Resources and SPC Nickel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPC Nickel Corp and Aldebaran Resources 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 Aldebaran Resources are associated (or correlated) with SPC Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPC Nickel Corp has no effect on the direction of Aldebaran Resources i.e., Aldebaran Resources and SPC Nickel go up and down completely randomly.
Pair Corralation between Aldebaran Resources and SPC Nickel
Assuming the 90 days horizon Aldebaran Resources is expected to generate 0.75 times more return on investment than SPC Nickel. However, Aldebaran Resources is 1.34 times less risky than SPC Nickel. It trades about 0.22 of its potential returns per unit of risk. SPC Nickel Corp is currently generating about -0.31 per unit of risk. If you would invest 120.00 in Aldebaran Resources on September 1, 2024 and sell it today you would earn a total of 30.00 from holding Aldebaran Resources or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aldebaran Resources vs. SPC Nickel Corp
Performance |
| Timeline |
| Aldebaran Resources |
| SPC Nickel Corp |
Aldebaran Resources and SPC Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldebaran Resources and SPC Nickel
The main advantage of trading using opposite Aldebaran Resources and SPC Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldebaran Resources position performs unexpectedly, SPC Nickel 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 SPC Nickel will offset losses from the drop in SPC Nickel's long position.| Aldebaran Resources vs. Huntsman Exploration | Aldebaran Resources vs. Aurelia Metals Limited | Aldebaran Resources vs. Adriatic Metals PLC | Aldebaran Resources vs. American Helium |
| SPC Nickel vs. ATT Inc | SPC Nickel vs. Merck Company | SPC Nickel vs. Walt Disney | SPC Nickel vs. Caterpillar |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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