Correlation Between Commerce Resources and Nickel Mines
Can any of the company-specific risk be diversified away by investing in both Commerce Resources 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 Commerce Resources and Nickel Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commerce Resources Corp and Nickel Mines Limited, you can compare the effects of market volatilities on Commerce Resources 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 Commerce Resources with a short position of Nickel Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commerce Resources and Nickel Mines.
Diversification Opportunities for Commerce Resources and Nickel Mines
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Commerce and Nickel is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Commerce Resources Corp 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 Commerce 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 Commerce Resources Corp 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 Commerce Resources i.e., Commerce Resources and Nickel Mines go up and down completely randomly.
Pair Corralation between Commerce Resources and Nickel Mines
Assuming the 90 days horizon Commerce Resources Corp is expected to under-perform the Nickel Mines. In addition to that, Commerce Resources is 2.02 times more volatile than Nickel Mines Limited. It trades about -0.03 of its total potential returns per unit of risk. Nickel Mines Limited is currently generating about 0.01 per unit of volatility. If you would invest 59.00 in Nickel Mines Limited on August 29, 2024 and sell it today you would lose (4.00) from holding Nickel Mines Limited or give up 6.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commerce Resources Corp vs. Nickel Mines Limited
Performance |
| Timeline |
| Commerce Resources Corp |
| Nickel Mines Limited |
Commerce Resources and Nickel Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commerce Resources and Nickel Mines
The main advantage of trading using opposite Commerce Resources and Nickel Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commerce Resources 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.| Commerce Resources vs. Silver Hammer Mining | Commerce Resources vs. Reyna Silver Corp | Commerce Resources vs. Guanajuato Silver | Commerce Resources vs. Silver One Resources |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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