Correlation Between NioCorp Developments and Thunder Power
Can any of the company-specific risk be diversified away by investing in both NioCorp Developments and Thunder Power 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 NioCorp Developments and Thunder Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NioCorp Developments Ltd and Thunder Power Holdings,, you can compare the effects of market volatilities on NioCorp Developments and Thunder Power 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 NioCorp Developments with a short position of Thunder Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of NioCorp Developments and Thunder Power.
Diversification Opportunities for NioCorp Developments and Thunder Power
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NioCorp and Thunder is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding NioCorp Developments Ltd and Thunder Power Holdings, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunder Power Holdings, and NioCorp Developments 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 NioCorp Developments Ltd are associated (or correlated) with Thunder Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunder Power Holdings, has no effect on the direction of NioCorp Developments i.e., NioCorp Developments and Thunder Power go up and down completely randomly.
Pair Corralation between NioCorp Developments and Thunder Power
Allowing for the 90-day total investment horizon NioCorp Developments Ltd is expected to generate 0.55 times more return on investment than Thunder Power. However, NioCorp Developments Ltd is 1.8 times less risky than Thunder Power. It trades about -0.04 of its potential returns per unit of risk. Thunder Power Holdings, is currently generating about -0.09 per unit of risk. If you would invest 305.00 in NioCorp Developments Ltd on September 2, 2024 and sell it today you would lose (172.00) from holding NioCorp Developments Ltd or give up 56.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NioCorp Developments Ltd vs. Thunder Power Holdings,
Performance |
| Timeline |
| NioCorp Developments |
| Thunder Power Holdings, |
NioCorp Developments and Thunder Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NioCorp Developments and Thunder Power
The main advantage of trading using opposite NioCorp Developments and Thunder Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NioCorp Developments position performs unexpectedly, Thunder Power 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 Thunder Power will offset losses from the drop in Thunder Power's long position.| NioCorp Developments vs. Teck Resources Ltd | NioCorp Developments vs. Sigma Lithium Resources | NioCorp Developments vs. Vale SA ADR | NioCorp Developments vs. Sayona Mining Limited |
| Thunder Power vs. Mativ Holdings | Thunder Power vs. Summit Materials | Thunder Power vs. Sensient Technologies | Thunder Power vs. Lion One Metals |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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