Correlation Between NioCorp Developments and Eagle Plains
Can any of the company-specific risk be diversified away by investing in both NioCorp Developments and Eagle Plains 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 Eagle Plains 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 Eagle Plains Resources, you can compare the effects of market volatilities on NioCorp Developments and Eagle Plains 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 Eagle Plains. Check out your portfolio center. Please also check ongoing floating volatility patterns of NioCorp Developments and Eagle Plains.
Diversification Opportunities for NioCorp Developments and Eagle Plains
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NioCorp and Eagle is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding NioCorp Developments Ltd and Eagle Plains Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Plains Resources 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 Eagle Plains. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Plains Resources has no effect on the direction of NioCorp Developments i.e., NioCorp Developments and Eagle Plains go up and down completely randomly.
Pair Corralation between NioCorp Developments and Eagle Plains
Allowing for the 90-day total investment horizon NioCorp Developments Ltd is expected to under-perform the Eagle Plains. But the stock apears to be less risky and, when comparing its historical volatility, NioCorp Developments Ltd is 1.93 times less risky than Eagle Plains. The stock trades about -0.06 of its potential returns per unit of risk. The Eagle Plains Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Eagle Plains Resources on September 3, 2024 and sell it today you would lose (3.00) from holding Eagle Plains Resources or give up 30.0% 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. Eagle Plains Resources
Performance |
| Timeline |
| NioCorp Developments |
| Eagle Plains Resources |
NioCorp Developments and Eagle Plains Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NioCorp Developments and Eagle Plains
The main advantage of trading using opposite NioCorp Developments and Eagle Plains positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NioCorp Developments position performs unexpectedly, Eagle Plains 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 Eagle Plains will offset losses from the drop in Eagle Plains' long position.| NioCorp Developments vs. Summit Materials | NioCorp Developments vs. Westrock Coffee | NioCorp Developments vs. Aldel Financial II | NioCorp Developments vs. Keurig Dr Pepper |
| Eagle Plains vs. Norra Metals Corp | Eagle Plains vs. E79 Resources Corp | Eagle Plains vs. Voltage Metals Corp | Eagle Plains 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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