Correlation Between Giga Metals and Critical Elements
Can any of the company-specific risk be diversified away by investing in both Giga Metals and Critical Elements 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 Giga Metals and Critical Elements into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Giga Metals and Critical Elements, you can compare the effects of market volatilities on Giga Metals and Critical Elements 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 Giga Metals with a short position of Critical Elements. Check out your portfolio center. Please also check ongoing floating volatility patterns of Giga Metals and Critical Elements.
Diversification Opportunities for Giga Metals and Critical Elements
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Giga and Critical is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Giga Metals and Critical Elements in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Critical Elements and Giga Metals 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 Giga Metals are associated (or correlated) with Critical Elements. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Critical Elements has no effect on the direction of Giga Metals i.e., Giga Metals and Critical Elements go up and down completely randomly.
Pair Corralation between Giga Metals and Critical Elements
Assuming the 90 days horizon Giga Metals is expected to generate 0.93 times more return on investment than Critical Elements. However, Giga Metals is 1.08 times less risky than Critical Elements. It trades about -0.04 of its potential returns per unit of risk. Critical Elements is currently generating about -0.08 per unit of risk. If you would invest 25.00 in Giga Metals on October 25, 2024 and sell it today you would lose (6.00) from holding Giga Metals or give up 24.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 23.73% |
| Values | Daily Returns |
Giga Metals vs. Critical Elements
Performance |
| Timeline |
| Giga Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Critical Elements |
Giga Metals and Critical Elements Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Giga Metals and Critical Elements
The main advantage of trading using opposite Giga Metals and Critical Elements positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Giga Metals position performs unexpectedly, Critical Elements 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 Critical Elements will offset losses from the drop in Critical Elements' long position.| Giga Metals vs. Canada Nickel | Giga Metals vs. Giga Metals Corp | Giga Metals vs. Talon Metals Corp | Giga Metals vs. FPX Nickel Corp |
| Critical Elements vs. Argosy Minerals Limited | Critical Elements vs. Aurelia Metals Limited | Critical Elements vs. Artemis Resources | Critical Elements vs. Ascendant Resources |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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