Correlation Between Nickel Creek and Flying Nickel
Can any of the company-specific risk be diversified away by investing in both Nickel Creek and Flying 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 Nickel Creek and Flying Nickel 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 Flying Nickel Mining, you can compare the effects of market volatilities on Nickel Creek and Flying 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 Nickel Creek with a short position of Flying Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nickel Creek and Flying Nickel.
Diversification Opportunities for Nickel Creek and Flying Nickel
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nickel and Flying is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Nickel Creek Platinum and Flying Nickel Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flying Nickel Mining 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 Flying Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flying Nickel Mining has no effect on the direction of Nickel Creek i.e., Nickel Creek and Flying Nickel go up and down completely randomly.
Pair Corralation between Nickel Creek and Flying Nickel
Assuming the 90 days trading horizon Nickel Creek Platinum is expected to under-perform the Flying Nickel. But the stock apears to be less risky and, when comparing its historical volatility, Nickel Creek Platinum is 6.25 times less risky than Flying Nickel. The stock trades about -0.05 of its potential returns per unit of risk. The Flying Nickel Mining is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Flying Nickel Mining on September 3, 2024 and sell it today you would lose (0.50) from holding Flying Nickel Mining or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Nickel Creek Platinum vs. Flying Nickel Mining
Performance |
| Timeline |
| Nickel Creek Platinum |
| Flying Nickel Mining |
Nickel Creek and Flying Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nickel Creek and Flying Nickel
The main advantage of trading using opposite Nickel Creek and Flying Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nickel Creek position performs unexpectedly, Flying 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 Flying Nickel will offset losses from the drop in Flying Nickel's long position.The idea behind Nickel Creek Platinum and Flying Nickel Mining 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.| Flying Nickel vs. Algoma Steel Group | Flying Nickel vs. Champion Iron | Flying Nickel vs. International Zeolite Corp | Flying Nickel vs. European Residential Real |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |