Correlation Between Québec Nickel and Frontier Lithium
Can any of the company-specific risk be diversified away by investing in both Québec Nickel and Frontier 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 Frontier 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 Frontier Lithium, you can compare the effects of market volatilities on Québec Nickel and Frontier 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 Frontier Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Québec Nickel and Frontier Lithium.
Diversification Opportunities for Québec Nickel and Frontier Lithium
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Québec and Frontier is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Qubec Nickel Corp and Frontier Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontier Lithium 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 Frontier Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontier Lithium has no effect on the direction of Québec Nickel i.e., Québec Nickel and Frontier Lithium go up and down completely randomly.
Pair Corralation between Québec Nickel and Frontier Lithium
Assuming the 90 days horizon Qubec Nickel Corp is expected to generate 3.57 times more return on investment than Frontier Lithium. However, Québec Nickel is 3.57 times more volatile than Frontier Lithium. It trades about -0.01 of its potential returns per unit of risk. Frontier Lithium is currently generating about -0.1 per unit of risk. If you would invest 8.00 in Qubec Nickel Corp on August 29, 2024 and sell it today you would lose (6.25) from holding Qubec Nickel Corp or give up 78.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Qubec Nickel Corp vs. Frontier Lithium
Performance |
| Timeline |
| Qubec Nickel Corp |
| Frontier Lithium |
Québec Nickel and Frontier Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Québec Nickel and Frontier Lithium
The main advantage of trading using opposite Québec Nickel and Frontier Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Québec Nickel position performs unexpectedly, Frontier 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 Frontier Lithium will offset losses from the drop in Frontier 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 |
| Frontier Lithium vs. Vision Lithium | Frontier Lithium vs. Critical Elements | Frontier Lithium vs. Cypress Development Corp | Frontier Lithium vs. Core Lithium |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |