Correlation Between Financial and Canada Nickel
Can any of the company-specific risk be diversified away by investing in both Financial and Canada Nickel 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 Financial and Canada Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financial 15 Split and Canada Nickel, you can compare the effects of market volatilities on Financial and Canada Nickel 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 Financial with a short position of Canada Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial and Canada Nickel.
Diversification Opportunities for Financial and Canada Nickel
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Financial and Canada is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Financial 15 Split and Canada Nickel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Nickel and Financial 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 Financial 15 Split are associated (or correlated) with Canada Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canada Nickel has no effect on the direction of Financial i.e., Financial and Canada Nickel go up and down completely randomly.
Pair Corralation between Financial and Canada Nickel
Assuming the 90 days trading horizon Financial 15 Split is expected to generate 0.08 times more return on investment than Canada Nickel. However, Financial 15 Split is 12.15 times less risky than Canada Nickel. It trades about 0.16 of its potential returns per unit of risk. Canada Nickel is currently generating about -0.01 per unit of risk. If you would invest 830.00 in Financial 15 Split on September 2, 2024 and sell it today you would earn a total of 229.00 from holding Financial 15 Split or generate 27.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Financial 15 Split vs. Canada Nickel
Performance |
| Timeline |
| Financial 15 Split |
| Canada Nickel |
Financial and Canada Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financial and Canada Nickel
The main advantage of trading using opposite Financial and Canada Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial position performs unexpectedly, Canada Nickel 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 Canada Nickel will offset losses from the drop in Canada Nickel's long position.| Financial vs. North American Financial | Financial vs. Dividend 15 Split | Financial vs. Dividend Growth Split | Financial vs. Dividend 15 Split |
| Canada Nickel vs. FPX Nickel Corp | Canada Nickel vs. Talon Metals Corp | Canada Nickel vs. Giga Metals Corp | Canada Nickel vs. American Lithium 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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