Correlation Between NioCorp Developments and Bear Creek
Can any of the company-specific risk be diversified away by investing in both NioCorp Developments and Bear 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 NioCorp Developments and Bear Creek 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 Bear Creek Mining, you can compare the effects of market volatilities on NioCorp Developments and Bear 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 NioCorp Developments with a short position of Bear Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of NioCorp Developments and Bear Creek.
Diversification Opportunities for NioCorp Developments and Bear Creek
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NioCorp and Bear is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding NioCorp Developments Ltd and Bear Creek Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bear Creek Mining 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 Bear Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bear Creek Mining has no effect on the direction of NioCorp Developments i.e., NioCorp Developments and Bear Creek go up and down completely randomly.
Pair Corralation between NioCorp Developments and Bear Creek
Allowing for the 90-day total investment horizon NioCorp Developments Ltd is expected to under-perform the Bear Creek. But the stock apears to be less risky and, when comparing its historical volatility, NioCorp Developments Ltd is 2.13 times less risky than Bear Creek. The stock trades about -0.37 of its potential returns per unit of risk. The Bear Creek Mining is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 38.00 in Bear Creek Mining on September 1, 2024 and sell it today you would lose (8.00) from holding Bear Creek Mining or give up 21.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NioCorp Developments Ltd vs. Bear Creek Mining
Performance |
| Timeline |
| NioCorp Developments |
| Bear Creek Mining |
NioCorp Developments and Bear Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NioCorp Developments and Bear Creek
The main advantage of trading using opposite NioCorp Developments and Bear Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NioCorp Developments position performs unexpectedly, Bear 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 Bear Creek will offset losses from the drop in Bear Creek's long position.| NioCorp Developments vs. Paiute Oil Mining | NioCorp Developments vs. Marfrig Global Foods | NioCorp Developments vs. Emerson Radio | NioCorp Developments vs. Reservoir Media |
| Bear Creek vs. South32 Limited | Bear Creek vs. NioCorp Developments Ltd | Bear Creek vs. HUMANA INC | Bear Creek vs. SCOR PK |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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