Correlation Between Nickel Mines and Winsome Resources
Can any of the company-specific risk be diversified away by investing in both Nickel Mines and Winsome Resources 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 Winsome Resources 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 Winsome Resources Limited, you can compare the effects of market volatilities on Nickel Mines and Winsome Resources 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 Winsome Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nickel Mines and Winsome Resources.
Diversification Opportunities for Nickel Mines and Winsome Resources
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nickel and Winsome is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Nickel Mines Limited and Winsome Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winsome Resources 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 Winsome Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winsome Resources has no effect on the direction of Nickel Mines i.e., Nickel Mines and Winsome Resources go up and down completely randomly.
Pair Corralation between Nickel Mines and Winsome Resources
Assuming the 90 days horizon Nickel Mines Limited is expected to under-perform the Winsome Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Nickel Mines Limited is 1.13 times less risky than Winsome Resources. The pink sheet trades about -0.25 of its potential returns per unit of risk. The Winsome Resources Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 32.00 in Winsome Resources Limited on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Winsome Resources Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nickel Mines Limited vs. Winsome Resources Limited
Performance |
| Timeline |
| Nickel Mines Limited |
| Winsome Resources |
Nickel Mines and Winsome Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nickel Mines and Winsome Resources
The main advantage of trading using opposite Nickel Mines and Winsome Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nickel Mines position performs unexpectedly, Winsome Resources 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 Winsome Resources will offset losses from the drop in Winsome Resources' 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 |
| Winsome Resources vs. Ardelyx | Winsome Resources vs. Spyre Therapeutics | Winsome Resources vs. Abcellera Biologics | Winsome Resources vs. QBE Insurance Group |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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