Correlation Between Prime Mining and Nickel Creek
Can any of the company-specific risk be diversified away by investing in both Prime Mining and Nickel 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 Prime Mining and Nickel Creek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prime Mining Corp and Nickel Creek Platinum, you can compare the effects of market volatilities on Prime Mining and Nickel 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 Prime Mining with a short position of Nickel Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Mining and Nickel Creek.
Diversification Opportunities for Prime Mining and Nickel Creek
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Prime and Nickel is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Prime Mining Corp and Nickel Creek Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nickel Creek Platinum and Prime Mining 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 Prime Mining Corp are associated (or correlated) with Nickel Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nickel Creek Platinum has no effect on the direction of Prime Mining i.e., Prime Mining and Nickel Creek go up and down completely randomly.
Pair Corralation between Prime Mining and Nickel Creek
Assuming the 90 days horizon Prime Mining Corp is expected to generate 1.61 times more return on investment than Nickel Creek. However, Prime Mining is 1.61 times more volatile than Nickel Creek Platinum. It trades about 0.0 of its potential returns per unit of risk. Nickel Creek Platinum is currently generating about -0.04 per unit of risk. If you would invest 116.00 in Prime Mining Corp on September 3, 2024 and sell it today you would lose (9.00) from holding Prime Mining Corp or give up 7.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prime Mining Corp vs. Nickel Creek Platinum
Performance |
| Timeline |
| Prime Mining Corp |
| Nickel Creek Platinum |
Prime Mining and Nickel Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Mining and Nickel Creek
The main advantage of trading using opposite Prime Mining and Nickel Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Mining position performs unexpectedly, Nickel 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 Nickel Creek will offset losses from the drop in Nickel Creek's long position.| Prime Mining vs. Kenorland Minerals | Prime Mining vs. Canstar Resources | Prime Mining vs. Euro Manganese | Prime Mining vs. Chalice Mining Limited |
| Nickel Creek vs. Ridgestone Mining | Nickel Creek vs. Focus Graphite | Nickel Creek vs. Jervois Mining | Nickel Creek vs. Altius 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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