Correlation Between Canada Nickel and Nobel Resources
Can any of the company-specific risk be diversified away by investing in both Canada Nickel and Nobel Resources 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 Nobel Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canada Nickel and Nobel Resources Corp, you can compare the effects of market volatilities on Canada Nickel and Nobel Resources 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 Nobel Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canada Nickel and Nobel Resources.
Diversification Opportunities for Canada Nickel and Nobel Resources
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canada and Nobel is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Canada Nickel and Nobel Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nobel Resources 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 Nobel Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nobel Resources Corp has no effect on the direction of Canada Nickel i.e., Canada Nickel and Nobel Resources go up and down completely randomly.
Pair Corralation between Canada Nickel and Nobel Resources
Assuming the 90 days horizon Canada Nickel is expected to generate 50.13 times less return on investment than Nobel Resources. But when comparing it to its historical volatility, Canada Nickel is 9.68 times less risky than Nobel Resources. It trades about 0.01 of its potential returns per unit of risk. Nobel Resources Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4.70 in Nobel Resources Corp on August 25, 2024 and sell it today you would lose (2.24) from holding Nobel Resources Corp or give up 47.66% 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. Nobel Resources Corp
Performance |
| Timeline |
| Canada Nickel |
| Nobel Resources Corp |
Canada Nickel and Nobel Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canada Nickel and Nobel Resources
The main advantage of trading using opposite Canada Nickel and Nobel Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canada Nickel position performs unexpectedly, Nobel Resources 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 Nobel Resources will offset losses from the drop in Nobel Resources' long position.| Canada Nickel vs. Nobel Resources Corp | Canada Nickel vs. Juggernaut Exploration | Canada Nickel vs. SPC Nickel Corp | Canada Nickel vs. Lotus Resources Limited |
| Nobel Resources vs. Norra Metals Corp | Nobel Resources vs. ZincX Resources Corp | Nobel Resources vs. Nuinsco Resources Limited | Nobel Resources vs. South Star Battery |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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