Correlation Between NioCorp Developments and BPCEGP

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Can any of the company-specific risk be diversified away by investing in both NioCorp Developments and BPCEGP 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 BPCEGP 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 BPCEGP 1625 14 JAN 25, you can compare the effects of market volatilities on NioCorp Developments and BPCEGP 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 BPCEGP. Check out your portfolio center. Please also check ongoing floating volatility patterns of NioCorp Developments and BPCEGP.

Diversification Opportunities for NioCorp Developments and BPCEGP

-0.28
  Correlation Coefficient

Very good diversification

The 3 months correlation between NioCorp and BPCEGP is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding NioCorp Developments Ltd and BPCEGP 1625 14 JAN 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BPCEGP 1625 14 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 BPCEGP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BPCEGP 1625 14 has no effect on the direction of NioCorp Developments i.e., NioCorp Developments and BPCEGP go up and down completely randomly.

Pair Corralation between NioCorp Developments and BPCEGP

Allowing for the 90-day total investment horizon NioCorp Developments Ltd is expected to generate 54.22 times more return on investment than BPCEGP. However, NioCorp Developments is 54.22 times more volatile than BPCEGP 1625 14 JAN 25. It trades about 0.04 of its potential returns per unit of risk. BPCEGP 1625 14 JAN 25 is currently generating about 0.01 per unit of risk. If you would invest  80.00  in NioCorp Developments Ltd on September 2, 2024 and sell it today you would earn a total of  53.00  from holding NioCorp Developments Ltd or generate 66.25% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy41.53%
ValuesDaily Returns

NioCorp Developments Ltd  vs.  BPCEGP 1625 14 JAN 25

 Performance 
       Timeline  
NioCorp Developments 

Risk-Adjusted Performance

0 of 100

 
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Over the last 90 days NioCorp Developments Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
BPCEGP 1625 14 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BPCEGP 1625 14 JAN 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for BPCEGP 1625 14 JAN 25 investors.

NioCorp Developments and BPCEGP Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with NioCorp Developments and BPCEGP

The main advantage of trading using opposite NioCorp Developments and BPCEGP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NioCorp Developments position performs unexpectedly, BPCEGP 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 BPCEGP will offset losses from the drop in BPCEGP's long position.
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The idea behind NioCorp Developments Ltd and BPCEGP 1625 14 JAN 25 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

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