Correlation Between Northern Graphite and Canada Nickel
Can any of the company-specific risk be diversified away by investing in both Northern Graphite 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 Northern Graphite and Canada Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Graphite and Canada Nickel, you can compare the effects of market volatilities on Northern Graphite 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 Northern Graphite with a short position of Canada Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Graphite and Canada Nickel.
Diversification Opportunities for Northern Graphite and Canada Nickel
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Northern and Canada is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Northern Graphite and Canada Nickel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Nickel and Northern Graphite 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 Northern Graphite 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 Northern Graphite i.e., Northern Graphite and Canada Nickel go up and down completely randomly.
Pair Corralation between Northern Graphite and Canada Nickel
Assuming the 90 days horizon Northern Graphite is expected to generate 4.08 times more return on investment than Canada Nickel. However, Northern Graphite is 4.08 times more volatile than Canada Nickel. It trades about 0.02 of its potential returns per unit of risk. Canada Nickel is currently generating about -0.1 per unit of risk. If you would invest 8.90 in Northern Graphite on September 3, 2024 and sell it today you would lose (3.10) from holding Northern Graphite or give up 34.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern Graphite vs. Canada Nickel
Performance |
| Timeline |
| Northern Graphite |
| Canada Nickel |
Northern Graphite and Canada Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Graphite and Canada Nickel
The main advantage of trading using opposite Northern Graphite and Canada Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Graphite 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.| Northern Graphite vs. Focus Graphite | Northern Graphite vs. Mason Graphite | Northern Graphite vs. Graphite One | Northern Graphite vs. Syrah Resources Limited |
| Canada Nickel vs. Qubec Nickel Corp | Canada Nickel vs. IGO Limited | Canada Nickel vs. Avarone Metals | Canada Nickel vs. Adriatic Metals PLC |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |