Correlation Between Nickel Creek and Clarke
Can any of the company-specific risk be diversified away by investing in both Nickel Creek and Clarke 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 Nickel Creek and Clarke into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nickel Creek Platinum and Clarke Inc, you can compare the effects of market volatilities on Nickel Creek and Clarke 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 Nickel Creek with a short position of Clarke. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nickel Creek and Clarke.
Diversification Opportunities for Nickel Creek and Clarke
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nickel and Clarke is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Nickel Creek Platinum and Clarke Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clarke Inc and Nickel Creek 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 Nickel Creek Platinum are associated (or correlated) with Clarke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clarke Inc has no effect on the direction of Nickel Creek i.e., Nickel Creek and Clarke go up and down completely randomly.
Pair Corralation between Nickel Creek and Clarke
Assuming the 90 days trading horizon Nickel Creek Platinum is expected to generate 8.54 times more return on investment than Clarke. However, Nickel Creek is 8.54 times more volatile than Clarke Inc. It trades about 0.04 of its potential returns per unit of risk. Clarke Inc is currently generating about 0.07 per unit of risk. If you would invest 600.00 in Nickel Creek Platinum on August 27, 2024 and sell it today you would lose (516.00) from holding Nickel Creek Platinum or give up 86.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nickel Creek Platinum vs. Clarke Inc
Performance |
| Timeline |
| Nickel Creek Platinum |
| Clarke Inc |
Nickel Creek and Clarke Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nickel Creek and Clarke
The main advantage of trading using opposite Nickel Creek and Clarke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nickel Creek position performs unexpectedly, Clarke 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 Clarke will offset losses from the drop in Clarke's long position.The idea behind Nickel Creek Platinum and Clarke Inc 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.| Clarke vs. Terravest Capital | Clarke vs. Clairvest Group | Clarke vs. Algoma Central | Clarke vs. Accord Financial Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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