Correlation Between Norra Metals and Nickel Mines
Can any of the company-specific risk be diversified away by investing in both Norra Metals and Nickel Mines 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 Norra Metals and Nickel Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norra Metals Corp and Nickel Mines Limited, you can compare the effects of market volatilities on Norra Metals and Nickel Mines 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 Norra Metals with a short position of Nickel Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norra Metals and Nickel Mines.
Diversification Opportunities for Norra Metals and Nickel Mines
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Norra and Nickel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Norra Metals Corp and Nickel Mines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nickel Mines Limited and Norra Metals 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 Norra Metals Corp are associated (or correlated) with Nickel Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nickel Mines Limited has no effect on the direction of Norra Metals i.e., Norra Metals and Nickel Mines go up and down completely randomly.
Pair Corralation between Norra Metals and Nickel Mines
Assuming the 90 days horizon Norra Metals Corp is expected to generate 17.38 times more return on investment than Nickel Mines. However, Norra Metals is 17.38 times more volatile than Nickel Mines Limited. It trades about 0.07 of its potential returns per unit of risk. Nickel Mines Limited is currently generating about 0.02 per unit of risk. If you would invest 1.70 in Norra Metals Corp on August 26, 2024 and sell it today you would lose (0.70) from holding Norra Metals Corp or give up 41.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norra Metals Corp vs. Nickel Mines Limited
Performance |
| Timeline |
| Norra Metals Corp |
| Nickel Mines Limited |
Norra Metals and Nickel Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norra Metals and Nickel Mines
The main advantage of trading using opposite Norra Metals and Nickel Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norra Metals position performs unexpectedly, Nickel Mines 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 Nickel Mines will offset losses from the drop in Nickel Mines' long position.| Norra Metals vs. NETGEAR | Norra Metals vs. Grupo Televisa SAB | Norra Metals vs. Weibo Corp | Norra Metals vs. Reservoir Media |
| Nickel Mines vs. Norra Metals Corp | Nickel Mines vs. ZincX Resources Corp | Nickel Mines vs. Nuinsco Resources Limited | Nickel Mines vs. South Star Battery |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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