Correlation Between Edison Cobalt and Qubec Nickel
Can any of the company-specific risk be diversified away by investing in both Edison Cobalt and Qubec 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 Edison Cobalt and Qubec Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edison Cobalt Corp and Qubec Nickel Corp, you can compare the effects of market volatilities on Edison Cobalt and Qubec 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 Edison Cobalt with a short position of Qubec Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edison Cobalt and Qubec Nickel.
Diversification Opportunities for Edison Cobalt and Qubec Nickel
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Edison and Qubec is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Edison Cobalt Corp and Qubec Nickel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qubec Nickel Corp and Edison Cobalt 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 Edison Cobalt Corp are associated (or correlated) with Qubec Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qubec Nickel Corp has no effect on the direction of Edison Cobalt i.e., Edison Cobalt and Qubec Nickel go up and down completely randomly.
Pair Corralation between Edison Cobalt and Qubec Nickel
Assuming the 90 days horizon Edison Cobalt Corp is expected to under-perform the Qubec Nickel. But the pink sheet apears to be less risky and, when comparing its historical volatility, Edison Cobalt Corp is 9.06 times less risky than Qubec Nickel. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Qubec Nickel Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Qubec Nickel Corp on September 18, 2024 and sell it today you would lose (7.55) from holding Qubec Nickel Corp or give up 47.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edison Cobalt Corp vs. Qubec Nickel Corp
Performance |
| Timeline |
| Edison Cobalt Corp |
| Qubec Nickel Corp |
Edison Cobalt and Qubec Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edison Cobalt and Qubec Nickel
The main advantage of trading using opposite Edison Cobalt and Qubec Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edison Cobalt position performs unexpectedly, Qubec 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 Qubec Nickel will offset losses from the drop in Qubec Nickel's long position.| Edison Cobalt vs. Qubec Nickel Corp | Edison Cobalt vs. IGO Limited | Edison Cobalt vs. Focus Graphite | Edison Cobalt vs. Mineral Res |
| Qubec Nickel vs. IGO Limited | Qubec Nickel vs. Focus Graphite | Qubec Nickel vs. Mineral Res | Qubec Nickel vs. Anson Resources Limited |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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