Correlation Between Champion Bear and Nickel Mines
Can any of the company-specific risk be diversified away by investing in both Champion Bear and Nickel Mines 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 Champion Bear and Nickel Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Bear Resources and Nickel Mines Limited, you can compare the effects of market volatilities on Champion Bear and Nickel Mines 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 Champion Bear with a short position of Nickel Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Bear and Nickel Mines.
Diversification Opportunities for Champion Bear and Nickel Mines
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Champion and Nickel is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Champion Bear Resources and Nickel Mines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nickel Mines Limited and Champion Bear 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 Champion Bear Resources are associated (or correlated) with Nickel Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nickel Mines Limited has no effect on the direction of Champion Bear i.e., Champion Bear and Nickel Mines go up and down completely randomly.
Pair Corralation between Champion Bear and Nickel Mines
Assuming the 90 days horizon Champion Bear Resources is expected to generate 7.49 times more return on investment than Nickel Mines. However, Champion Bear is 7.49 times more volatile than Nickel Mines Limited. It trades about 0.04 of its potential returns per unit of risk. Nickel Mines Limited is currently generating about 0.02 per unit of risk. If you would invest 15.00 in Champion Bear Resources on September 1, 2024 and sell it today you would lose (11.00) from holding Champion Bear Resources or give up 73.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Champion Bear Resources vs. Nickel Mines Limited
Performance |
| Timeline |
| Champion Bear Resources |
| Nickel Mines Limited |
Champion Bear and Nickel Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Bear and Nickel Mines
The main advantage of trading using opposite Champion Bear and Nickel Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Bear position performs unexpectedly, Nickel Mines 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 Mines will offset losses from the drop in Nickel Mines' long position.| Champion Bear vs. Aurelia Metals Limited | Champion Bear vs. Baroyeca Gold Silver | Champion Bear vs. Centaurus Metals Limited | Champion Bear vs. Edison Cobalt Corp |
| Nickel Mines vs. IGO Limited | Nickel Mines vs. Qubec Nickel Corp | Nickel Mines vs. Mineral Resources Limited | Nickel Mines vs. Surge Copper Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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