Correlation Between Nickel Creek and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both Nickel Creek and Canlan Ice 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 Canlan Ice 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 Canlan Ice Sports, you can compare the effects of market volatilities on Nickel Creek and Canlan Ice 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 Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nickel Creek and Canlan Ice.
Diversification Opportunities for Nickel Creek and Canlan Ice
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nickel and Canlan is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Nickel Creek Platinum and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports 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 Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of Nickel Creek i.e., Nickel Creek and Canlan Ice go up and down completely randomly.
Pair Corralation between Nickel Creek and Canlan Ice
Assuming the 90 days trading horizon Nickel Creek Platinum is expected to generate 12.61 times more return on investment than Canlan Ice. However, Nickel Creek is 12.61 times more volatile than Canlan Ice Sports. It trades about 0.06 of its potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.06 per unit of risk. If you would invest 200.00 in Nickel Creek Platinum on August 24, 2024 and sell it today you would lose (116.00) from holding Nickel Creek Platinum or give up 58.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nickel Creek Platinum vs. Canlan Ice Sports
Performance |
| Timeline |
| Nickel Creek Platinum |
| Canlan Ice Sports |
Nickel Creek and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nickel Creek and Canlan Ice
The main advantage of trading using opposite Nickel Creek and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nickel Creek position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.| Nickel Creek vs. Fairfax Financial Holdings | Nickel Creek vs. US Financial 15 | Nickel Creek vs. Aurora Solar Technologies | Nickel Creek vs. Solar Alliance Energy |
| Canlan Ice vs. Nickel Creek Platinum | Canlan Ice vs. Converge Technology Solutions | Canlan Ice vs. Forsys Metals Corp | Canlan Ice vs. Electra Battery Materials |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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