Correlation Between Québec Nickel and American Lithium
Can any of the company-specific risk be diversified away by investing in both Québec Nickel and American Lithium 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 Québec Nickel and American Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qubec Nickel Corp and American Lithium Corp, you can compare the effects of market volatilities on Québec Nickel and American Lithium 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 Québec Nickel with a short position of American Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Québec Nickel and American Lithium.
Diversification Opportunities for Québec Nickel and American Lithium
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Québec and American is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Qubec Nickel Corp and American Lithium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Lithium Corp and Québec 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 Qubec Nickel Corp are associated (or correlated) with American Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Lithium Corp has no effect on the direction of Québec Nickel i.e., Québec Nickel and American Lithium go up and down completely randomly.
Pair Corralation between Québec Nickel and American Lithium
Assuming the 90 days horizon Qubec Nickel Corp is expected to under-perform the American Lithium. In addition to that, Québec Nickel is 1.64 times more volatile than American Lithium Corp. It trades about -0.01 of its total potential returns per unit of risk. American Lithium Corp is currently generating about 0.03 per unit of volatility. If you would invest 68.00 in American Lithium Corp on September 1, 2024 and sell it today you would earn a total of 1.00 from holding American Lithium Corp or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Qubec Nickel Corp vs. American Lithium Corp
Performance |
| Timeline |
| Qubec Nickel Corp |
| American Lithium Corp |
Québec Nickel and American Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Québec Nickel and American Lithium
The main advantage of trading using opposite Québec Nickel and American Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Québec Nickel position performs unexpectedly, American Lithium 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 American Lithium will offset losses from the drop in American Lithium's long position.| Québec Nickel vs. Norra Metals Corp | Québec Nickel vs. E79 Resources Corp | Québec Nickel vs. Voltage Metals Corp | Québec Nickel vs. Cantex Mine Development |
| American Lithium vs. BCE Inc | American Lithium vs. Radcom | American Lithium vs. NETGEAR | American Lithium vs. Space Communication |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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