Correlation Between Nickel Mines and StrikePoint Gold
Can any of the company-specific risk be diversified away by investing in both Nickel Mines and StrikePoint Gold 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 StrikePoint Gold 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 StrikePoint Gold, you can compare the effects of market volatilities on Nickel Mines and StrikePoint Gold 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 StrikePoint Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nickel Mines and StrikePoint Gold.
Diversification Opportunities for Nickel Mines and StrikePoint Gold
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nickel and StrikePoint is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Nickel Mines Limited and StrikePoint Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StrikePoint Gold 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 StrikePoint Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StrikePoint Gold has no effect on the direction of Nickel Mines i.e., Nickel Mines and StrikePoint Gold go up and down completely randomly.
Pair Corralation between Nickel Mines and StrikePoint Gold
Assuming the 90 days horizon Nickel Mines is expected to generate 1151.18 times less return on investment than StrikePoint Gold. But when comparing it to its historical volatility, Nickel Mines Limited is 46.73 times less risky than StrikePoint Gold. It trades about 0.01 of its potential returns per unit of risk. StrikePoint Gold is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 54.00 in StrikePoint Gold on August 29, 2024 and sell it today you would lose (41.00) from holding StrikePoint Gold or give up 75.93% 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. StrikePoint Gold
Performance |
| Timeline |
| Nickel Mines Limited |
| StrikePoint Gold |
Nickel Mines and StrikePoint Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nickel Mines and StrikePoint Gold
The main advantage of trading using opposite Nickel Mines and StrikePoint Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nickel Mines position performs unexpectedly, StrikePoint Gold 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 StrikePoint Gold will offset losses from the drop in StrikePoint Gold'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 |
| StrikePoint Gold vs. Rockridge Resources | StrikePoint Gold vs. Ameriwest Lithium | StrikePoint Gold vs. Osisko Metals Incorporated | StrikePoint Gold vs. Volt Lithium 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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