Correlation Between Québec Nickel and Anglo American
Can any of the company-specific risk be diversified away by investing in both Québec Nickel and Anglo American 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 Anglo American 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 Anglo American PLC, you can compare the effects of market volatilities on Québec Nickel and Anglo American 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 Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Québec Nickel and Anglo American.
Diversification Opportunities for Québec Nickel and Anglo American
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Québec and Anglo is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Qubec Nickel Corp and Anglo American PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo American PLC 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 Anglo American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo American PLC has no effect on the direction of Québec Nickel i.e., Québec Nickel and Anglo American go up and down completely randomly.
Pair Corralation between Québec Nickel and Anglo American
Assuming the 90 days horizon Qubec Nickel Corp is expected to generate 5.35 times more return on investment than Anglo American. However, Québec Nickel is 5.35 times more volatile than Anglo American PLC. It trades about 0.0 of its potential returns per unit of risk. Anglo American PLC is currently generating about 0.0 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qubec Nickel Corp vs. Anglo American PLC
Performance |
| Timeline |
| Qubec Nickel Corp |
| Anglo American PLC |
Québec Nickel and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Québec Nickel and Anglo American
The main advantage of trading using opposite Québec Nickel and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Québec Nickel position performs unexpectedly, Anglo American 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 Anglo American will offset losses from the drop in Anglo American'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 |
| Anglo American vs. BHP Group Limited | Anglo American vs. Avarone Metals | Anglo American vs. Huntsman Exploration | Anglo American vs. Aurelia Metals Limited |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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