Correlation Between Nickel Creek and Ceylon Graphite
Can any of the company-specific risk be diversified away by investing in both Nickel Creek and Ceylon Graphite 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 Ceylon Graphite 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 Ceylon Graphite Corp, you can compare the effects of market volatilities on Nickel Creek and Ceylon Graphite 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 Ceylon Graphite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nickel Creek and Ceylon Graphite.
Diversification Opportunities for Nickel Creek and Ceylon Graphite
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nickel and Ceylon is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Nickel Creek Platinum and Ceylon Graphite Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceylon Graphite Corp 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 Ceylon Graphite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceylon Graphite Corp has no effect on the direction of Nickel Creek i.e., Nickel Creek and Ceylon Graphite go up and down completely randomly.
Pair Corralation between Nickel Creek and Ceylon Graphite
Assuming the 90 days horizon Nickel Creek is expected to generate 4.19 times less return on investment than Ceylon Graphite. But when comparing it to its historical volatility, Nickel Creek Platinum is 5.83 times less risky than Ceylon Graphite. It trades about 0.1 of its potential returns per unit of risk. Ceylon Graphite Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Ceylon Graphite Corp on November 28, 2024 and sell it today you would earn a total of 0.00 from holding Ceylon Graphite Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nickel Creek Platinum vs. Ceylon Graphite Corp
Performance |
| Timeline |
| Nickel Creek Platinum |
| Ceylon Graphite Corp |
Nickel Creek and Ceylon Graphite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nickel Creek and Ceylon Graphite
The main advantage of trading using opposite Nickel Creek and Ceylon Graphite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nickel Creek position performs unexpectedly, Ceylon Graphite 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 Ceylon Graphite will offset losses from the drop in Ceylon Graphite's long position.| Nickel Creek vs. Ridgestone Mining | Nickel Creek vs. Focus Graphite | Nickel Creek vs. Jervois Mining | Nickel Creek vs. Altius Minerals |
| Ceylon Graphite vs. Argent Minerals Limited | Ceylon Graphite vs. Edison Cobalt Corp | Ceylon Graphite vs. Champion Bear Resources | Ceylon Graphite vs. Ascendant Resources |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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