Correlation Between Centaurus Metals and SPC Nickel
Can any of the company-specific risk be diversified away by investing in both Centaurus Metals 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 Centaurus Metals and SPC Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centaurus Metals Limited and SPC Nickel Corp, you can compare the effects of market volatilities on Centaurus Metals 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 Centaurus Metals with a short position of SPC Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaurus Metals and SPC Nickel.
Diversification Opportunities for Centaurus Metals and SPC Nickel
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Centaurus and SPC is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Centaurus Metals Limited 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 Centaurus Metals 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 Centaurus Metals Limited 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 Centaurus Metals i.e., Centaurus Metals and SPC Nickel go up and down completely randomly.
Pair Corralation between Centaurus Metals and SPC Nickel
Assuming the 90 days horizon Centaurus Metals Limited is expected to generate 0.51 times more return on investment than SPC Nickel. However, Centaurus Metals Limited is 1.95 times less risky than SPC Nickel. It trades about -0.09 of its potential returns per unit of risk. SPC Nickel Corp is currently generating about -0.38 per unit of risk. If you would invest 33.00 in Centaurus Metals Limited on August 29, 2024 and sell it today you would lose (4.00) from holding Centaurus Metals Limited or give up 12.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Centaurus Metals Limited vs. SPC Nickel Corp
Performance |
| Timeline |
| Centaurus Metals |
| SPC Nickel Corp |
Centaurus Metals and SPC Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centaurus Metals and SPC Nickel
The main advantage of trading using opposite Centaurus Metals and SPC Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centaurus Metals 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.| Centaurus Metals vs. Rockridge Resources | Centaurus Metals vs. Vital Metals Limited | Centaurus Metals vs. Ameriwest Lithium | Centaurus Metals vs. Osisko Metals Incorporated |
| SPC Nickel vs. Rockridge Resources | SPC Nickel vs. Vital Metals Limited | SPC Nickel vs. Ameriwest Lithium | SPC Nickel vs. Osisko Metals Incorporated |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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