Correlation Between Québec Nickel and Class 1
Can any of the company-specific risk be diversified away by investing in both Québec Nickel and Class 1 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 Class 1 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 Class 1 Nickel, you can compare the effects of market volatilities on Québec Nickel and Class 1 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 Class 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Québec Nickel and Class 1.
Diversification Opportunities for Québec Nickel and Class 1
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Québec and Class is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Qubec Nickel Corp and Class 1 Nickel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Class 1 Nickel 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 Class 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Class 1 Nickel has no effect on the direction of Québec Nickel i.e., Québec Nickel and Class 1 go up and down completely randomly.
Pair Corralation between Québec Nickel and Class 1
Assuming the 90 days horizon Qubec Nickel Corp is expected to under-perform the Class 1. In addition to that, Québec Nickel is 1.18 times more volatile than Class 1 Nickel. It trades about -0.13 of its total potential returns per unit of risk. Class 1 Nickel is currently generating about 0.26 per unit of volatility. If you would invest 8.80 in Class 1 Nickel on September 4, 2024 and sell it today you would earn a total of 9.20 from holding Class 1 Nickel or generate 104.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qubec Nickel Corp vs. Class 1 Nickel
Performance |
| Timeline |
| Qubec Nickel Corp |
| Class 1 Nickel |
Québec Nickel and Class 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Québec Nickel and Class 1
The main advantage of trading using opposite Québec Nickel and Class 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Québec Nickel position performs unexpectedly, Class 1 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 Class 1 will offset losses from the drop in Class 1'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 |
| Class 1 vs. Qubec Nickel Corp | Class 1 vs. IGO Limited | Class 1 vs. Avarone Metals | Class 1 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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