Correlation Between Québec Nickel and Fortescue Metals
Can any of the company-specific risk be diversified away by investing in both Québec Nickel and Fortescue Metals 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 Fortescue Metals 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 Fortescue Metals Group, you can compare the effects of market volatilities on Québec Nickel and Fortescue Metals 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 Fortescue Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Québec Nickel and Fortescue Metals.
Diversification Opportunities for Québec Nickel and Fortescue Metals
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Québec and Fortescue is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Qubec Nickel Corp and Fortescue Metals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortescue Metals 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 Fortescue Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortescue Metals has no effect on the direction of Québec Nickel i.e., Québec Nickel and Fortescue Metals go up and down completely randomly.
Pair Corralation between Québec Nickel and Fortescue Metals
Assuming the 90 days horizon Qubec Nickel Corp is expected to generate 4.68 times more return on investment than Fortescue Metals. However, Québec Nickel is 4.68 times more volatile than Fortescue Metals Group. It trades about -0.01 of its potential returns per unit of risk. Fortescue Metals Group is currently generating about -0.06 per unit of risk. If you would invest 11.00 in Qubec Nickel Corp on September 1, 2024 and sell it today you would lose (9.25) from holding Qubec Nickel Corp or give up 84.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Qubec Nickel Corp vs. Fortescue Metals Group
Performance |
| Timeline |
| Qubec Nickel Corp |
| Fortescue Metals |
Québec Nickel and Fortescue Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Québec Nickel and Fortescue Metals
The main advantage of trading using opposite Québec Nickel and Fortescue Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Québec Nickel position performs unexpectedly, Fortescue Metals 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 Fortescue Metals will offset losses from the drop in Fortescue Metals' 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 |
| Fortescue Metals vs. IGO Limited | Fortescue Metals vs. Qubec Nickel Corp | Fortescue Metals vs. IGO Limited | Fortescue Metals vs. Hannan Metals |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |