Correlation Between Québec Nickel and Western Magnesium
Can any of the company-specific risk be diversified away by investing in both Québec Nickel and Western Magnesium 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 Western Magnesium 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 Western Magnesium, you can compare the effects of market volatilities on Québec Nickel and Western Magnesium 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 Western Magnesium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Québec Nickel and Western Magnesium.
Diversification Opportunities for Québec Nickel and Western Magnesium
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Québec and Western is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Qubec Nickel Corp and Western Magnesium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Magnesium 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 Western Magnesium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Magnesium has no effect on the direction of Québec Nickel i.e., Québec Nickel and Western Magnesium go up and down completely randomly.
Pair Corralation between Québec Nickel and Western Magnesium
Assuming the 90 days horizon Qubec Nickel Corp is expected to generate 1.31 times more return on investment than Western Magnesium. However, Québec Nickel is 1.31 times more volatile than Western Magnesium. It trades about 0.01 of its potential returns per unit of risk. Western Magnesium is currently generating about -0.09 per unit of risk. If you would invest 11.00 in Qubec Nickel Corp on September 4, 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 Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Qubec Nickel Corp vs. Western Magnesium
Performance |
| Timeline |
| Qubec Nickel Corp |
| Western Magnesium |
Québec Nickel and Western Magnesium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Québec Nickel and Western Magnesium
The main advantage of trading using opposite Québec Nickel and Western Magnesium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Québec Nickel position performs unexpectedly, Western Magnesium 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 Western Magnesium will offset losses from the drop in Western Magnesium'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 |
| Western Magnesium vs. Qubec Nickel Corp | Western Magnesium vs. IGO Limited | Western Magnesium vs. Avarone Metals | Western Magnesium 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |