Correlation Between Canada Nickel and Grid Metals
Can any of the company-specific risk be diversified away by investing in both Canada Nickel and Grid Metals 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 Canada Nickel and Grid Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canada Nickel and Grid Metals Corp, you can compare the effects of market volatilities on Canada Nickel and Grid Metals 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 Canada Nickel with a short position of Grid Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canada Nickel and Grid Metals.
Diversification Opportunities for Canada Nickel and Grid Metals
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canada and Grid is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Canada Nickel and Grid Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grid Metals Corp and Canada Nickel 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 Canada Nickel are associated (or correlated) with Grid Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grid Metals Corp has no effect on the direction of Canada Nickel i.e., Canada Nickel and Grid Metals go up and down completely randomly.
Pair Corralation between Canada Nickel and Grid Metals
Assuming the 90 days horizon Canada Nickel is expected to generate 0.59 times more return on investment than Grid Metals. However, Canada Nickel is 1.7 times less risky than Grid Metals. It trades about 0.0 of its potential returns per unit of risk. Grid Metals Corp is currently generating about -0.02 per unit of risk. If you would invest 114.00 in Canada Nickel on August 25, 2024 and sell it today you would lose (16.00) from holding Canada Nickel or give up 14.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canada Nickel vs. Grid Metals Corp
Performance |
| Timeline |
| Canada Nickel |
| Grid Metals Corp |
Canada Nickel and Grid Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canada Nickel and Grid Metals
The main advantage of trading using opposite Canada Nickel and Grid Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canada Nickel position performs unexpectedly, Grid Metals 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 Grid Metals will offset losses from the drop in Grid Metals' long position.| Canada Nickel vs. FPX Nickel Corp | Canada Nickel vs. Talon Metals Corp | Canada Nickel vs. Giga Metals Corp | Canada Nickel vs. American Lithium Corp |
| Grid Metals vs. Stillwater Critical Minerals | Grid Metals vs. Gungnir Resources | Grid Metals vs. Golden Pursuit Resources | Grid Metals vs. New Age 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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