Correlation Between Nickel Mines and Eskay Mining
Can any of the company-specific risk be diversified away by investing in both Nickel Mines and Eskay Mining 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 Mines and Eskay Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nickel Mines Limited and Eskay Mining Corp, you can compare the effects of market volatilities on Nickel Mines and Eskay Mining 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 Mines with a short position of Eskay Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nickel Mines and Eskay Mining.
Diversification Opportunities for Nickel Mines and Eskay Mining
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nickel and Eskay is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Nickel Mines Limited and Eskay Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eskay Mining Corp and Nickel Mines 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 Mines Limited are associated (or correlated) with Eskay Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eskay Mining Corp has no effect on the direction of Nickel Mines i.e., Nickel Mines and Eskay Mining go up and down completely randomly.
Pair Corralation between Nickel Mines and Eskay Mining
Assuming the 90 days horizon Nickel Mines Limited is expected to generate 0.78 times more return on investment than Eskay Mining. However, Nickel Mines Limited is 1.29 times less risky than Eskay Mining. It trades about 0.05 of its potential returns per unit of risk. Eskay Mining Corp is currently generating about -0.05 per unit of risk. If you would invest 45.00 in Nickel Mines Limited on September 1, 2024 and sell it today you would earn a total of 10.00 from holding Nickel Mines Limited or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.47% |
| Values | Daily Returns |
Nickel Mines Limited vs. Eskay Mining Corp
Performance |
| Timeline |
| Nickel Mines Limited |
| Eskay Mining Corp |
Nickel Mines and Eskay Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nickel Mines and Eskay Mining
The main advantage of trading using opposite Nickel Mines and Eskay Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nickel Mines position performs unexpectedly, Eskay Mining 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 Eskay Mining will offset losses from the drop in Eskay Mining's long position.| Nickel Mines vs. IGO Limited | Nickel Mines vs. Qubec Nickel Corp | Nickel Mines vs. Mineral Resources Limited | Nickel Mines vs. Surge Copper Corp |
| Eskay Mining vs. Aftermath Silver | Eskay Mining vs. Group Ten Metals | Eskay Mining vs. Prime Mining Corp | Eskay Mining vs. Juggernaut Exploration |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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