Correlation Between LQwD FinTech and Nickel Creek
Can any of the company-specific risk be diversified away by investing in both LQwD FinTech 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 LQwD FinTech and Nickel Creek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LQwD FinTech Corp and Nickel Creek Platinum, you can compare the effects of market volatilities on LQwD FinTech 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 LQwD FinTech with a short position of Nickel Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of LQwD FinTech and Nickel Creek.
Diversification Opportunities for LQwD FinTech and Nickel Creek
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LQwD and Nickel is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding LQwD FinTech Corp 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 LQwD FinTech 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 LQwD FinTech Corp 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 LQwD FinTech i.e., LQwD FinTech and Nickel Creek go up and down completely randomly.
Pair Corralation between LQwD FinTech and Nickel Creek
Assuming the 90 days trading horizon LQwD FinTech Corp is expected to generate 3.19 times more return on investment than Nickel Creek. However, LQwD FinTech is 3.19 times more volatile than Nickel Creek Platinum. It trades about 0.09 of its potential returns per unit of risk. Nickel Creek Platinum is currently generating about 0.04 per unit of risk. If you would invest 122.00 in LQwD FinTech Corp on August 28, 2024 and sell it today you would earn a total of 10.00 from holding LQwD FinTech Corp or generate 8.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LQwD FinTech Corp vs. Nickel Creek Platinum
Performance |
| Timeline |
| LQwD FinTech Corp |
| Nickel Creek Platinum |
LQwD FinTech and Nickel Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LQwD FinTech and Nickel Creek
The main advantage of trading using opposite LQwD FinTech and Nickel Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LQwD FinTech 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.| LQwD FinTech vs. Slate Grocery REIT | LQwD FinTech vs. Roots Corp | LQwD FinTech vs. Aimia Inc | LQwD FinTech vs. Tucows Inc |
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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