Correlation Between BCM Resources and SPC Nickel
Can any of the company-specific risk be diversified away by investing in both BCM 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 BCM 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 BCM Resources and SPC Nickel Corp, you can compare the effects of market volatilities on BCM 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 BCM Resources with a short position of SPC Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCM Resources and SPC Nickel.
Diversification Opportunities for BCM Resources and SPC Nickel
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BCM and SPC is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding BCM 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 BCM 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 BCM 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 BCM Resources i.e., BCM Resources and SPC Nickel go up and down completely randomly.
Pair Corralation between BCM Resources and SPC Nickel
Assuming the 90 days horizon BCM Resources is expected to generate 1.89 times less return on investment than SPC Nickel. But when comparing it to its historical volatility, BCM Resources is 1.52 times less risky than SPC Nickel. It trades about 0.04 of its potential returns per unit of risk. SPC Nickel Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4.76 in SPC Nickel Corp on September 3, 2024 and sell it today you would lose (3.36) from holding SPC Nickel Corp or give up 70.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BCM Resources vs. SPC Nickel Corp
Performance |
| Timeline |
| BCM Resources |
| SPC Nickel Corp |
BCM Resources and SPC Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCM Resources and SPC Nickel
The main advantage of trading using opposite BCM Resources and SPC Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCM 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.| BCM Resources vs. Edison Cobalt Corp | BCM Resources vs. Champion Bear Resources | BCM Resources vs. Avarone Metals | BCM Resources vs. Adriatic Metals PLC |
| SPC Nickel vs. Qubec Nickel Corp | SPC Nickel vs. IGO Limited | SPC Nickel vs. Anson Resources Limited | SPC Nickel vs. Avarone Metals |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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