Correlation Between Adriatic Metals and Canada Nickel
Can any of the company-specific risk be diversified away by investing in both Adriatic Metals and Canada 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 Adriatic Metals and Canada Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adriatic Metals PLC and Canada Nickel, you can compare the effects of market volatilities on Adriatic Metals and Canada 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 Adriatic Metals with a short position of Canada Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adriatic Metals and Canada Nickel.
Diversification Opportunities for Adriatic Metals and Canada Nickel
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Adriatic and Canada is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Adriatic Metals PLC and Canada Nickel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Nickel and Adriatic Metals 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 Adriatic Metals PLC are associated (or correlated) with Canada Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canada Nickel has no effect on the direction of Adriatic Metals i.e., Adriatic Metals and Canada Nickel go up and down completely randomly.
Pair Corralation between Adriatic Metals and Canada Nickel
Assuming the 90 days horizon Adriatic Metals PLC is expected to under-perform the Canada Nickel. But the pink sheet apears to be less risky and, when comparing its historical volatility, Adriatic Metals PLC is 1.17 times less risky than Canada Nickel. The pink sheet trades about -0.19 of its potential returns per unit of risk. The Canada Nickel is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 72.00 in Canada Nickel on September 4, 2024 and sell it today you would lose (2.00) from holding Canada Nickel or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Adriatic Metals PLC vs. Canada Nickel
Performance |
| Timeline |
| Adriatic Metals PLC |
| Canada Nickel |
Adriatic Metals and Canada Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adriatic Metals and Canada Nickel
The main advantage of trading using opposite Adriatic Metals and Canada Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adriatic Metals position performs unexpectedly, Canada 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 Canada Nickel will offset losses from the drop in Canada Nickel's long position.| Adriatic Metals vs. Huntsman Exploration | Adriatic Metals vs. Aurelia Metals Limited | Adriatic Metals vs. American Helium | Adriatic Metals vs. Progressive Planet Solutions |
| Canada Nickel vs. Nobel Resources Corp | Canada Nickel vs. Juggernaut Exploration | Canada Nickel vs. SPC Nickel Corp | Canada Nickel vs. Lotus Resources Limited |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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