Correlation Between Québec Nickel and Canada Rare
Can any of the company-specific risk be diversified away by investing in both Québec Nickel and Canada Rare 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 Canada Rare 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 Canada Rare Earth, you can compare the effects of market volatilities on Québec Nickel and Canada Rare 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 Canada Rare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Québec Nickel and Canada Rare.
Diversification Opportunities for Québec Nickel and Canada Rare
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Québec and Canada is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Qubec Nickel Corp and Canada Rare Earth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Rare Earth 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 Canada Rare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canada Rare Earth has no effect on the direction of Québec Nickel i.e., Québec Nickel and Canada Rare go up and down completely randomly.
Pair Corralation between Québec Nickel and Canada Rare
Assuming the 90 days horizon Québec Nickel is expected to generate 27.4 times less return on investment than Canada Rare. But when comparing it to its historical volatility, Qubec Nickel Corp is 3.51 times less risky than Canada Rare. It trades about 0.02 of its potential returns per unit of risk. Canada Rare Earth is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Canada Rare Earth on September 1, 2024 and sell it today you would earn a total of 0.15 from holding Canada Rare Earth or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.47% |
| Values | Daily Returns |
Qubec Nickel Corp vs. Canada Rare Earth
Performance |
| Timeline |
| Qubec Nickel Corp |
| Canada Rare Earth |
Québec Nickel and Canada Rare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Québec Nickel and Canada Rare
The main advantage of trading using opposite Québec Nickel and Canada Rare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Québec Nickel position performs unexpectedly, Canada Rare 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 Canada Rare will offset losses from the drop in Canada Rare'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 |
| Canada Rare vs. Commerce Resources Corp | Canada Rare vs. Medallion Resources | Canada Rare vs. Ucore Rare Metals | Canada Rare vs. Bravada Gold |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |