Correlation Between Flying Nickel and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Flying Nickel and Dow Jones 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 Flying Nickel and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flying Nickel Mining and Dow Jones Industrial, you can compare the effects of market volatilities on Flying Nickel and Dow Jones 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 Flying Nickel with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flying Nickel and Dow Jones.
Diversification Opportunities for Flying Nickel and Dow Jones
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Flying and Dow is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Flying Nickel Mining and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Flying 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 Flying Nickel Mining are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Flying Nickel i.e., Flying Nickel and Dow Jones go up and down completely randomly.
Pair Corralation between Flying Nickel and Dow Jones
Assuming the 90 days horizon Flying Nickel Mining is expected to generate 22.14 times more return on investment than Dow Jones. However, Flying Nickel is 22.14 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.15 per unit of risk. If you would invest 5.20 in Flying Nickel Mining on August 26, 2024 and sell it today you would lose (1.80) from holding Flying Nickel Mining or give up 34.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flying Nickel Mining vs. Dow Jones Industrial
Performance |
| Timeline |
Flying Nickel and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Flying Nickel Mining
Pair trading matchups for Flying Nickel
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Flying Nickel and Dow Jones
The main advantage of trading using opposite Flying Nickel and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flying Nickel position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Flying Nickel vs. Euro Manganese | Flying Nickel vs. Lithium Australia NL | Flying Nickel vs. Bushveld Minerals Limited | Flying Nickel vs. Core Assets Corp |
| Dow Jones vs. MI Homes | Dow Jones vs. Franklin Street Properties | Dow Jones vs. Summit Hotel Properties | Dow Jones vs. Portillos |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |