Correlation Between NioCorp Developments and Viking Holdings
Can any of the company-specific risk be diversified away by investing in both NioCorp Developments and Viking Holdings 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 Viking Holdings 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 Viking Holdings, you can compare the effects of market volatilities on NioCorp Developments and Viking Holdings 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 Viking Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of NioCorp Developments and Viking Holdings.
Diversification Opportunities for NioCorp Developments and Viking Holdings
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NioCorp and Viking is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding NioCorp Developments Ltd and Viking Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viking 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 Viking Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viking Holdings has no effect on the direction of NioCorp Developments i.e., NioCorp Developments and Viking Holdings go up and down completely randomly.
Pair Corralation between NioCorp Developments and Viking Holdings
Allowing for the 90-day total investment horizon NioCorp Developments Ltd is expected to under-perform the Viking Holdings. In addition to that, NioCorp Developments is 2.9 times more volatile than Viking Holdings. It trades about -0.09 of its total potential returns per unit of risk. Viking Holdings is currently generating about 0.32 per unit of volatility. If you would invest 3,355 in Viking Holdings on August 30, 2024 and sell it today you would earn a total of 1,290 from holding Viking Holdings or generate 38.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NioCorp Developments Ltd vs. Viking Holdings
Performance |
| Timeline |
| NioCorp Developments |
| Viking Holdings |
NioCorp Developments and Viking Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NioCorp Developments and Viking Holdings
The main advantage of trading using opposite NioCorp Developments and Viking Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NioCorp Developments position performs unexpectedly, Viking Holdings 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 Viking Holdings will offset losses from the drop in Viking Holdings' long position.| NioCorp Developments vs. FTAI Aviation Ltd | NioCorp Developments vs. United Rentals | NioCorp Developments vs. Brunswick | NioCorp Developments vs. Wabash National |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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