Correlation Between Flying Nickel and Pershing Resources
Can any of the company-specific risk be diversified away by investing in both Flying Nickel and Pershing 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 Pershing 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 Pershing Resources, you can compare the effects of market volatilities on Flying Nickel and Pershing 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 Pershing Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flying Nickel and Pershing Resources.
Diversification Opportunities for Flying Nickel and Pershing Resources
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Flying and Pershing is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Flying Nickel Mining and Pershing Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pershing Resources 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 Pershing Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pershing Resources has no effect on the direction of Flying Nickel i.e., Flying Nickel and Pershing Resources go up and down completely randomly.
Pair Corralation between Flying Nickel and Pershing Resources
Assuming the 90 days horizon Flying Nickel is expected to generate 2.71 times less return on investment than Pershing Resources. But when comparing it to its historical volatility, Flying Nickel Mining is 1.44 times less risky than Pershing Resources. It trades about 0.05 of its potential returns per unit of risk. Pershing Resources is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2.10 in Pershing Resources on December 11, 2024 and sell it today you would earn a total of 1.00 from holding Pershing Resources or generate 47.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.1% |
| Values | Daily Returns |
Flying Nickel Mining vs. Pershing Resources
Performance |
| Timeline |
| Flying Nickel Mining |
Risk-Adjusted Performance
Insignificant
Weak | Strong |
| Pershing Resources |
Flying Nickel and Pershing Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flying Nickel and Pershing Resources
The main advantage of trading using opposite Flying Nickel and Pershing Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flying Nickel position performs unexpectedly, Pershing 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 Pershing Resources will offset losses from the drop in Pershing Resources' long position.| Flying Nickel vs. Euro Manganese | ||
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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