Correlation Between Nickel Mines and Mineral Res
Can any of the company-specific risk be diversified away by investing in both Nickel Mines and Mineral Res 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 Mineral Res 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 Mineral Res, you can compare the effects of market volatilities on Nickel Mines and Mineral Res 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 Mineral Res. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nickel Mines and Mineral Res.
Diversification Opportunities for Nickel Mines and Mineral Res
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nickel and Mineral is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Nickel Mines Limited and Mineral Res in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mineral Res 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 Mineral Res. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mineral Res has no effect on the direction of Nickel Mines i.e., Nickel Mines and Mineral Res go up and down completely randomly.
Pair Corralation between Nickel Mines and Mineral Res
Assuming the 90 days horizon Nickel Mines Limited is expected to under-perform the Mineral Res. But the pink sheet apears to be less risky and, when comparing its historical volatility, Nickel Mines Limited is 1.36 times less risky than Mineral Res. The pink sheet trades about -0.25 of its potential returns per unit of risk. The Mineral Res is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 2,301 in Mineral Res on August 29, 2024 and sell it today you would lose (155.00) from holding Mineral Res or give up 6.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nickel Mines Limited vs. Mineral Res
Performance |
| Timeline |
| Nickel Mines Limited |
| Mineral Res |
Nickel Mines and Mineral Res Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nickel Mines and Mineral Res
The main advantage of trading using opposite Nickel Mines and Mineral Res positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nickel Mines position performs unexpectedly, Mineral Res 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 Mineral Res will offset losses from the drop in Mineral Res' 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 |
| Mineral Res vs. Rockridge Resources | Mineral Res vs. Vital Metals Limited | Mineral Res vs. Ameriwest Lithium | Mineral Res vs. Osisko Metals Incorporated |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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