Correlation Between Metals X and Qubec Nickel
Can any of the company-specific risk be diversified away by investing in both Metals X and Qubec 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 Metals X and Qubec Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metals X Limited and Qubec Nickel Corp, you can compare the effects of market volatilities on Metals X and Qubec 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 Metals X with a short position of Qubec Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals X and Qubec Nickel.
Diversification Opportunities for Metals X and Qubec Nickel
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Metals and Qubec is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Metals X Limited and Qubec Nickel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qubec Nickel Corp and Metals X 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 Metals X Limited are associated (or correlated) with Qubec Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qubec Nickel Corp has no effect on the direction of Metals X i.e., Metals X and Qubec Nickel go up and down completely randomly.
Pair Corralation between Metals X and Qubec Nickel
Assuming the 90 days horizon Metals X Limited is expected to under-perform the Qubec Nickel. But the pink sheet apears to be less risky and, when comparing its historical volatility, Metals X Limited is 26.16 times less risky than Qubec Nickel. The pink sheet trades about -0.26 of its potential returns per unit of risk. The Qubec Nickel Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Qubec Nickel Corp on September 13, 2024 and sell it today you would lose (7.71) from holding Qubec Nickel Corp or give up 48.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Metals X Limited vs. Qubec Nickel Corp
Performance |
| Timeline |
| Metals X Limited |
| Qubec Nickel Corp |
Metals X and Qubec Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metals X and Qubec Nickel
The main advantage of trading using opposite Metals X and Qubec Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metals X position performs unexpectedly, Qubec 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 Qubec Nickel will offset losses from the drop in Qubec Nickel's long position.| Metals X vs. Qubec Nickel Corp | Metals X vs. IGO Limited | Metals X vs. Focus Graphite | Metals X vs. Mineral Res |
| Qubec Nickel vs. Norra Metals Corp | Qubec Nickel vs. E79 Resources Corp | Qubec Nickel vs. Voltage Metals Corp | Qubec Nickel vs. Cantex Mine Development |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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