Correlation Between Decade Resources and Flying Nickel
Can any of the company-specific risk be diversified away by investing in both Decade Resources and Flying 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 Decade Resources and Flying Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Decade Resources and Flying Nickel Mining, you can compare the effects of market volatilities on Decade Resources and Flying 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 Decade Resources with a short position of Flying Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Decade Resources and Flying Nickel.
Diversification Opportunities for Decade Resources and Flying Nickel
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Decade and Flying is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Decade Resources and Flying Nickel Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flying Nickel Mining and Decade 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 Decade Resources are associated (or correlated) with Flying Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flying Nickel Mining has no effect on the direction of Decade Resources i.e., Decade Resources and Flying Nickel go up and down completely randomly.
Pair Corralation between Decade Resources and Flying Nickel
Assuming the 90 days horizon Decade Resources is expected to under-perform the Flying Nickel. But the pink sheet apears to be less risky and, when comparing its historical volatility, Decade Resources is 2.17 times less risky than Flying Nickel. The pink sheet trades about -0.12 of its potential returns per unit of risk. The Flying Nickel Mining is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3.32 in Flying Nickel Mining on August 28, 2024 and sell it today you would earn a total of 0.08 from holding Flying Nickel Mining or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Decade Resources vs. Flying Nickel Mining
Performance |
| Timeline |
| Decade Resources |
| Flying Nickel Mining |
Decade Resources and Flying Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Decade Resources and Flying Nickel
The main advantage of trading using opposite Decade Resources and Flying Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Decade Resources position performs unexpectedly, Flying 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 Flying Nickel will offset losses from the drop in Flying Nickel's long position.| Decade Resources vs. First American Silver | Decade Resources vs. Australian Vanadium Limited | Decade Resources vs. International Lithium Corp | Decade Resources vs. Wealth Minerals |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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