Correlation Between Flying Nickel and Grid Metals
Can any of the company-specific risk be diversified away by investing in both Flying Nickel and Grid Metals 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 Grid Metals 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 Grid Metals Corp, you can compare the effects of market volatilities on Flying Nickel and Grid Metals 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 Grid Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flying Nickel and Grid Metals.
Diversification Opportunities for Flying Nickel and Grid Metals
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Flying and Grid is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Flying Nickel Mining and Grid Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grid Metals 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 Grid Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grid Metals Corp has no effect on the direction of Flying Nickel i.e., Flying Nickel and Grid Metals go up and down completely randomly.
Pair Corralation between Flying Nickel and Grid Metals
Assuming the 90 days horizon Flying Nickel Mining is expected to generate 2.7 times more return on investment than Grid Metals. However, Flying Nickel is 2.7 times more volatile than Grid Metals Corp. It trades about 0.11 of its potential returns per unit of risk. Grid Metals Corp is currently generating about -0.11 per unit of risk. 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 |
Flying Nickel Mining vs. Grid Metals Corp
Performance |
| Timeline |
| Flying Nickel Mining |
| Grid Metals Corp |
Flying Nickel and Grid Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flying Nickel and Grid Metals
The main advantage of trading using opposite Flying Nickel and Grid Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flying Nickel position performs unexpectedly, Grid Metals 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 Grid Metals will offset losses from the drop in Grid Metals' long position.The idea behind Flying Nickel Mining and Grid Metals Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Grid Metals vs. Ascendant Resources | Grid Metals vs. Cantex Mine Development | Grid Metals vs. Amarc Resources | Grid Metals vs. Sterling Metals 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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