Correlation Between Norra Metals and Placer Creek
Can any of the company-specific risk be diversified away by investing in both Norra Metals and Placer Creek 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 Placer Creek 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 Placer Creek Mining, you can compare the effects of market volatilities on Norra Metals and Placer Creek 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 Placer Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norra Metals and Placer Creek.
Diversification Opportunities for Norra Metals and Placer Creek
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Norra and Placer is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Norra Metals Corp and Placer Creek Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Placer Creek Mining 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 Placer Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Placer Creek Mining has no effect on the direction of Norra Metals i.e., Norra Metals and Placer Creek go up and down completely randomly.
Pair Corralation between Norra Metals and Placer Creek
If you would invest 0.01 in Placer Creek Mining on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Placer Creek Mining or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norra Metals Corp vs. Placer Creek Mining
Performance |
| Timeline |
| Norra Metals Corp |
| Placer Creek Mining |
Norra Metals and Placer Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norra Metals and Placer Creek
The main advantage of trading using opposite Norra Metals and Placer Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norra Metals position performs unexpectedly, Placer Creek 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 Placer Creek will offset losses from the drop in Placer Creek's long position.| Norra Metals vs. Elmos Semiconductor SE | Norra Metals vs. IPG Photonics | Norra Metals vs. Microchip Technology | Norra Metals vs. Analog Devices |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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