Correlation Between Generation Mining and Nickel Creek
Can any of the company-specific risk be diversified away by investing in both Generation Mining and Nickel Creek 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 Generation Mining and Nickel Creek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Generation Mining Limited and Nickel Creek Platinum, you can compare the effects of market volatilities on Generation Mining and Nickel Creek 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 Generation Mining with a short position of Nickel Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generation Mining and Nickel Creek.
Diversification Opportunities for Generation Mining and Nickel Creek
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Generation and Nickel is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Generation Mining Limited and Nickel Creek Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nickel Creek Platinum and Generation Mining 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 Generation Mining Limited are associated (or correlated) with Nickel Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nickel Creek Platinum has no effect on the direction of Generation Mining i.e., Generation Mining and Nickel Creek go up and down completely randomly.
Pair Corralation between Generation Mining and Nickel Creek
Assuming the 90 days horizon Generation Mining is expected to generate 3.5 times less return on investment than Nickel Creek. But when comparing it to its historical volatility, Generation Mining Limited is 1.22 times less risky than Nickel Creek. It trades about 0.03 of its potential returns per unit of risk. Nickel Creek Platinum is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 33.00 in Nickel Creek Platinum on November 5, 2024 and sell it today you would earn a total of 2.00 from holding Nickel Creek Platinum or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Generation Mining Limited vs. Nickel Creek Platinum
Performance |
| Timeline |
| Generation Mining |
| Nickel Creek Platinum |
Generation Mining and Nickel Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Generation Mining and Nickel Creek
The main advantage of trading using opposite Generation Mining and Nickel Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Generation Mining position performs unexpectedly, Nickel Creek 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 Nickel Creek will offset losses from the drop in Nickel Creek's long position.| Generation Mining vs. Mundoro Capital | Generation Mining vs. Norra Metals Corp | Generation Mining vs. E79 Resources Corp | Generation Mining vs. Voltage Metals Corp |
| Nickel Creek vs. Ridgestone Mining | Nickel Creek vs. Focus Graphite | Nickel Creek vs. Jervois Mining | Nickel Creek vs. Altius Minerals |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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