Correlation Between Nobel Resources and Canada Nickel
Can any of the company-specific risk be diversified away by investing in both Nobel Resources and Canada Nickel 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 Nobel Resources and Canada Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nobel Resources Corp and Canada Nickel, you can compare the effects of market volatilities on Nobel Resources and Canada Nickel 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 Nobel Resources with a short position of Canada Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nobel Resources and Canada Nickel.
Diversification Opportunities for Nobel Resources and Canada Nickel
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nobel and Canada is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Nobel Resources Corp and Canada Nickel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Nickel and Nobel Resources 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 Nobel Resources Corp are associated (or correlated) with Canada Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canada Nickel has no effect on the direction of Nobel Resources i.e., Nobel Resources and Canada Nickel go up and down completely randomly.
Pair Corralation between Nobel Resources and Canada Nickel
Assuming the 90 days horizon Nobel Resources Corp is expected to generate 16.9 times more return on investment than Canada Nickel. However, Nobel Resources is 16.9 times more volatile than Canada Nickel. It trades about 0.06 of its potential returns per unit of risk. Canada Nickel is currently generating about -0.09 per unit of risk. If you would invest 3.00 in Nobel Resources Corp on August 29, 2024 and sell it today you would lose (0.48) from holding Nobel Resources Corp or give up 16.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nobel Resources Corp vs. Canada Nickel
Performance |
| Timeline |
| Nobel Resources Corp |
| Canada Nickel |
Nobel Resources and Canada Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nobel Resources and Canada Nickel
The main advantage of trading using opposite Nobel Resources and Canada Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nobel Resources position performs unexpectedly, Canada Nickel 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 Canada Nickel will offset losses from the drop in Canada Nickel's long position.| Nobel Resources vs. Rockridge Resources | Nobel Resources vs. Ameriwest Lithium | Nobel Resources vs. Osisko Metals Incorporated | Nobel Resources vs. Volt Lithium Corp |
| Canada Nickel vs. Nobel Resources Corp | Canada Nickel vs. Juggernaut Exploration | Canada Nickel vs. SPC Nickel Corp | Canada Nickel vs. Lotus Resources Limited |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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