Correlation Between Québec Nickel and Cascadero Copper
Can any of the company-specific risk be diversified away by investing in both Québec Nickel and Cascadero Copper 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 Cascadero Copper 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 Cascadero Copper, you can compare the effects of market volatilities on Québec Nickel and Cascadero Copper 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 Cascadero Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Québec Nickel and Cascadero Copper.
Diversification Opportunities for Québec Nickel and Cascadero Copper
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Québec and Cascadero is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Qubec Nickel Corp and Cascadero Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cascadero Copper 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 Cascadero Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cascadero Copper has no effect on the direction of Québec Nickel i.e., Québec Nickel and Cascadero Copper go up and down completely randomly.
Pair Corralation between Québec Nickel and Cascadero Copper
Assuming the 90 days horizon Qubec Nickel Corp is expected to under-perform the Cascadero Copper. But the otc stock apears to be less risky and, when comparing its historical volatility, Qubec Nickel Corp is 4.41 times less risky than Cascadero Copper. The otc stock trades about -0.13 of its potential returns per unit of risk. The Cascadero Copper is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1.20 in Cascadero Copper on September 4, 2024 and sell it today you would lose (0.41) from holding Cascadero Copper or give up 34.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Qubec Nickel Corp vs. Cascadero Copper
Performance |
| Timeline |
| Qubec Nickel Corp |
| Cascadero Copper |
Québec Nickel and Cascadero Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Québec Nickel and Cascadero Copper
The main advantage of trading using opposite Québec Nickel and Cascadero Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Québec Nickel position performs unexpectedly, Cascadero Copper 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 Cascadero Copper will offset losses from the drop in Cascadero Copper'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 |
| Cascadero Copper vs. Qubec Nickel Corp | Cascadero Copper vs. IGO Limited | Cascadero Copper vs. Avarone Metals | Cascadero Copper vs. Adriatic Metals PLC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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