Correlation Between Québec Nickel and IGO
Can any of the company-specific risk be diversified away by investing in both Québec Nickel and IGO 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 IGO 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 IGO Limited, you can compare the effects of market volatilities on Québec Nickel and IGO 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 IGO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Québec Nickel and IGO.
Diversification Opportunities for Québec Nickel and IGO
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Québec and IGO is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Qubec Nickel Corp and IGO Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGO Limited 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 IGO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGO Limited has no effect on the direction of Québec Nickel i.e., Québec Nickel and IGO go up and down completely randomly.
Pair Corralation between Québec Nickel and IGO
Assuming the 90 days horizon Qubec Nickel Corp is expected to generate 4.27 times more return on investment than IGO. However, Québec Nickel is 4.27 times more volatile than IGO Limited. It trades about 0.0 of its potential returns per unit of risk. IGO Limited is currently generating about -0.04 per unit of risk. If you would invest 130.00 in Qubec Nickel Corp on August 29, 2024 and sell it today you would lose (128.25) from holding Qubec Nickel Corp or give up 98.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qubec Nickel Corp vs. IGO Limited
Performance |
| Timeline |
| Qubec Nickel Corp |
| IGO Limited |
Québec Nickel and IGO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Québec Nickel and IGO
The main advantage of trading using opposite Québec Nickel and IGO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Québec Nickel position performs unexpectedly, IGO 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 IGO will offset losses from the drop in IGO'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 |
| IGO vs. Rockridge Resources | IGO vs. Ameriwest Lithium | IGO vs. Osisko Metals Incorporated | IGO vs. Volt Lithium Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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