Correlation Between Nickel Mines and Globex Mining
Can any of the company-specific risk be diversified away by investing in both Nickel Mines and Globex 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 Globex 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 Globex Mining Enterprises, you can compare the effects of market volatilities on Nickel Mines and Globex 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 Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nickel Mines and Globex Mining.
Diversification Opportunities for Nickel Mines and Globex Mining
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nickel and Globex is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Nickel Mines Limited and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises 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 Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of Nickel Mines i.e., Nickel Mines and Globex Mining go up and down completely randomly.
Pair Corralation between Nickel Mines and Globex Mining
Assuming the 90 days horizon Nickel Mines is expected to generate 1.06 times less return on investment than Globex Mining. In addition to that, Nickel Mines is 2.01 times more volatile than Globex Mining Enterprises. It trades about 0.01 of its total potential returns per unit of risk. Globex Mining Enterprises is currently generating about 0.03 per unit of volatility. If you would invest 73.00 in Globex Mining Enterprises on September 3, 2024 and sell it today you would earn a total of 4.00 from holding Globex Mining Enterprises or generate 5.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Nickel Mines Limited vs. Globex Mining Enterprises
Performance |
| Timeline |
| Nickel Mines Limited |
| Globex Mining Enterprises |
Nickel Mines and Globex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nickel Mines and Globex Mining
The main advantage of trading using opposite Nickel Mines and Globex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nickel Mines position performs unexpectedly, Globex 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 Globex Mining will offset losses from the drop in Globex 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 |
| Globex Mining vs. Advantage Solutions | Globex Mining vs. Atlas Corp | Globex Mining vs. PureCycle Technologies | Globex Mining vs. WM Technology |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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