Correlation Between Globex Mining and Nickel Mines
Can any of the company-specific risk be diversified away by investing in both Globex Mining and Nickel Mines 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 Globex Mining and Nickel Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globex Mining Enterprises and Nickel Mines Limited, you can compare the effects of market volatilities on Globex Mining and Nickel Mines 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 Globex Mining with a short position of Nickel Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and Nickel Mines.
Diversification Opportunities for Globex Mining and Nickel Mines
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Globex and Nickel is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and Nickel Mines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nickel Mines Limited and Globex 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 Globex Mining Enterprises are associated (or correlated) with Nickel Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nickel Mines Limited has no effect on the direction of Globex Mining i.e., Globex Mining and Nickel Mines go up and down completely randomly.
Pair Corralation between Globex Mining and Nickel Mines
Assuming the 90 days horizon Globex Mining Enterprises is expected to generate 0.63 times more return on investment than Nickel Mines. However, Globex Mining Enterprises is 1.6 times less risky than Nickel Mines. It trades about 0.05 of its potential returns per unit of risk. Nickel Mines Limited is currently generating about 0.02 per unit of risk. If you would invest 48.00 in Globex Mining Enterprises on September 1, 2024 and sell it today you would earn a total of 28.00 from holding Globex Mining Enterprises or generate 58.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Globex Mining Enterprises vs. Nickel Mines Limited
Performance |
| Timeline |
| Globex Mining Enterprises |
| Nickel Mines Limited |
Globex Mining and Nickel Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globex Mining and Nickel Mines
The main advantage of trading using opposite Globex Mining and Nickel Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining position performs unexpectedly, Nickel Mines 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 Mines will offset losses from the drop in Nickel Mines' long position.| Globex Mining vs. South32 Limited | Globex Mining vs. NioCorp Developments Ltd | Globex Mining vs. HUMANA INC | Globex Mining vs. SCOR PK |
| Nickel Mines vs. IGO Limited | Nickel Mines vs. Qubec Nickel Corp | Nickel Mines vs. Mineral Resources Limited | Nickel Mines vs. Surge Copper 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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