Correlation Between Québec Nickel and Hannan Metals
Can any of the company-specific risk be diversified away by investing in both Québec Nickel and Hannan 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 Hannan 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 Hannan Metals, you can compare the effects of market volatilities on Québec Nickel and Hannan 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 Hannan Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Québec Nickel and Hannan Metals.
Diversification Opportunities for Québec Nickel and Hannan Metals
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Québec and Hannan is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Qubec Nickel Corp and Hannan Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannan 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 Hannan Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannan Metals has no effect on the direction of Québec Nickel i.e., Québec Nickel and Hannan Metals go up and down completely randomly.
Pair Corralation between Québec Nickel and Hannan Metals
Assuming the 90 days horizon Qubec Nickel Corp is expected to under-perform the Hannan Metals. In addition to that, Québec Nickel is 3.75 times more volatile than Hannan Metals. It trades about -0.1 of its total potential returns per unit of risk. Hannan Metals is currently generating about 0.28 per unit of volatility. If you would invest 32.00 in Hannan Metals on September 1, 2024 and sell it today you would earn a total of 11.00 from holding Hannan Metals or generate 34.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Qubec Nickel Corp vs. Hannan Metals
Performance |
| Timeline |
| Qubec Nickel Corp |
| Hannan Metals |
Québec Nickel and Hannan Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Québec Nickel and Hannan Metals
The main advantage of trading using opposite Québec Nickel and Hannan Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Québec Nickel position performs unexpectedly, Hannan 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 Hannan Metals will offset losses from the drop in Hannan 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 |
| Hannan Metals vs. Atco Mining | Hannan Metals vs. Leading Edge Materials | Hannan Metals vs. Arianne Phosphate | Hannan Metals vs. Global Battery 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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