Correlation Between Flying Nickel and E79 Resources
Can any of the company-specific risk be diversified away by investing in both Flying Nickel and E79 Resources 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 E79 Resources 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 E79 Resources Corp, you can compare the effects of market volatilities on Flying Nickel and E79 Resources 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 E79 Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flying Nickel and E79 Resources.
Diversification Opportunities for Flying Nickel and E79 Resources
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Flying and E79 is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Flying Nickel Mining and E79 Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E79 Resources Corp 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 E79 Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E79 Resources Corp has no effect on the direction of Flying Nickel i.e., Flying Nickel and E79 Resources go up and down completely randomly.
Pair Corralation between Flying Nickel and E79 Resources
Assuming the 90 days horizon Flying Nickel Mining is expected to generate 1.09 times more return on investment than E79 Resources. However, Flying Nickel is 1.09 times more volatile than E79 Resources Corp. It trades about 0.11 of its potential returns per unit of risk. E79 Resources Corp is currently generating about -0.06 per unit of risk. If you would invest 3.32 in Flying Nickel Mining on August 29, 2024 and sell it today you would earn a total of 0.12 from holding Flying Nickel Mining or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Flying Nickel Mining vs. E79 Resources Corp
Performance |
| Timeline |
| Flying Nickel Mining |
| E79 Resources Corp |
Flying Nickel and E79 Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flying Nickel and E79 Resources
The main advantage of trading using opposite Flying Nickel and E79 Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flying Nickel position performs unexpectedly, E79 Resources 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 E79 Resources will offset losses from the drop in E79 Resources' 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 |
| E79 Resources vs. Norra Metals Corp | E79 Resources vs. Voltage Metals Corp | E79 Resources vs. Cantex Mine Development | E79 Resources vs. Amarc Resources |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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