Correlation Between Nickel Mines and IGO
Can any of the company-specific risk be diversified away by investing in both Nickel Mines and IGO 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 IGO 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 IGO Limited, you can compare the effects of market volatilities on Nickel Mines and IGO 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 IGO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nickel Mines and IGO.
Diversification Opportunities for Nickel Mines and IGO
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nickel and IGO is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Nickel Mines Limited and IGO Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGO Limited 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 IGO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGO Limited has no effect on the direction of Nickel Mines i.e., Nickel Mines and IGO go up and down completely randomly.
Pair Corralation between Nickel Mines and IGO
Assuming the 90 days horizon Nickel Mines Limited is expected to generate 1.94 times more return on investment than IGO. However, Nickel Mines is 1.94 times more volatile than IGO Limited. It trades about -0.07 of its potential returns per unit of risk. IGO Limited is currently generating about -0.18 per unit of risk. If you would invest 62.00 in Nickel Mines Limited on November 1, 2024 and sell it today you would lose (9.00) from holding Nickel Mines Limited or give up 14.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nickel Mines Limited vs. IGO Limited
Performance |
| Timeline |
| Nickel Mines Limited |
| IGO Limited |
Nickel Mines and IGO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nickel Mines and IGO
The main advantage of trading using opposite Nickel Mines and IGO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nickel Mines position performs unexpectedly, IGO 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 IGO will offset losses from the drop in IGO'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 |
| IGO vs. Qubec Nickel Corp | IGO vs. Nickel Mines Limited | IGO vs. Mineral Resources Limited | IGO vs. Surge Copper Corp |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |