Correlation Between NYSE Composite and Nickel Mines
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Nickel Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Nickel Mines Limited, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Nickel Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Nickel Mines.
Diversification Opportunities for NYSE Composite and Nickel Mines
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Nickel is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Nickel Mines go up and down completely randomly.
Pair Corralation between NYSE Composite and Nickel Mines
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.8 times less return on investment than Nickel Mines. But when comparing it to its historical volatility, NYSE Composite is 6.64 times less risky than Nickel Mines. It trades about 0.1 of its potential returns per unit of risk. Nickel Mines Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 44.00 in Nickel Mines Limited on August 26, 2024 and sell it today you would earn a total of 15.00 from holding Nickel Mines Limited or generate 34.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Nickel Mines Limited
Performance |
| Timeline |
NYSE Composite and Nickel Mines Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Nickel Mines Limited
Pair trading matchups for Nickel Mines
Pair Trading with NYSE Composite and Nickel Mines
The main advantage of trading using opposite NYSE Composite and Nickel Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| Nickel Mines vs. Norra Metals Corp | Nickel Mines vs. ZincX Resources Corp | Nickel Mines vs. Nuinsco Resources Limited | Nickel Mines vs. Mundoro Capital |
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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