Correlation Between Empire State and Nickel Mines
Can any of the company-specific risk be diversified away by investing in both Empire State and Nickel Mines 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 Empire State and Nickel Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire State Realty and Nickel Mines Limited, you can compare the effects of market volatilities on Empire State and Nickel Mines 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 Empire State with a short position of Nickel Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Nickel Mines.
Diversification Opportunities for Empire State and Nickel Mines
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Empire and Nickel is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Nickel Mines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nickel Mines Limited and Empire State 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 Empire State Realty are associated (or correlated) with Nickel Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nickel Mines Limited has no effect on the direction of Empire State i.e., Empire State and Nickel Mines go up and down completely randomly.
Pair Corralation between Empire State and Nickel Mines
Given the investment horizon of 90 days Empire State Realty is expected to generate 0.35 times more return on investment than Nickel Mines. However, Empire State Realty is 2.84 times less risky than Nickel Mines. It trades about 0.09 of its potential returns per unit of risk. Nickel Mines Limited is currently generating about 0.01 per unit of risk. If you would invest 945.00 in Empire State Realty on September 1, 2024 and sell it today you would earn a total of 151.00 from holding Empire State Realty or generate 15.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Empire State Realty vs. Nickel Mines Limited
Performance |
| Timeline |
| Empire State Realty |
| Nickel Mines Limited |
Empire State and Nickel Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Nickel Mines
The main advantage of trading using opposite Empire State and Nickel Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Nickel Mines 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 Nickel Mines will offset losses from the drop in Nickel Mines' long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Nickel Mines vs. IGO Limited | Nickel Mines vs. Qubec Nickel Corp | Nickel Mines vs. Mineral Resources Limited | Nickel Mines vs. Surge Copper Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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