Correlation Between Premium Nickel and Blue Moon
Can any of the company-specific risk be diversified away by investing in both Premium Nickel and Blue Moon 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 Premium Nickel and Blue Moon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premium Nickel Resources and Blue Moon Metals, you can compare the effects of market volatilities on Premium Nickel and Blue Moon 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 Premium Nickel with a short position of Blue Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premium Nickel and Blue Moon.
Diversification Opportunities for Premium Nickel and Blue Moon
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Premium and Blue is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Premium Nickel Resources and Blue Moon Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Moon Metals and Premium Nickel 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 Premium Nickel Resources are associated (or correlated) with Blue Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Moon Metals has no effect on the direction of Premium Nickel i.e., Premium Nickel and Blue Moon go up and down completely randomly.
Pair Corralation between Premium Nickel and Blue Moon
Assuming the 90 days horizon Premium Nickel Resources is expected to under-perform the Blue Moon. In addition to that, Premium Nickel is 1.23 times more volatile than Blue Moon Metals. It trades about -0.35 of its total potential returns per unit of risk. Blue Moon Metals is currently generating about 0.18 per unit of volatility. If you would invest 23.00 in Blue Moon Metals on August 24, 2024 and sell it today you would earn a total of 3.00 from holding Blue Moon Metals or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premium Nickel Resources vs. Blue Moon Metals
Performance |
| Timeline |
| Premium Nickel Resources |
| Blue Moon Metals |
Premium Nickel and Blue Moon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premium Nickel and Blue Moon
The main advantage of trading using opposite Premium Nickel and Blue Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premium Nickel position performs unexpectedly, Blue Moon 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 Blue Moon will offset losses from the drop in Blue Moon's long position.| Premium Nickel vs. Norra Metals Corp | Premium Nickel vs. Amarc Resources | Premium Nickel vs. ZincX Resources Corp | Premium Nickel vs. Nuinsco Resources Limited |
| Blue Moon vs. Canada Carbon | Blue Moon vs. Premium Nickel Resources | Blue Moon vs. Clime Investment Management | Blue Moon vs. CopAur Minerals |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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