Correlation Between Québec Nickel and SPC Nickel
Can any of the company-specific risk be diversified away by investing in both Québec Nickel and SPC Nickel 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 SPC Nickel 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 SPC Nickel Corp, you can compare the effects of market volatilities on Québec Nickel and SPC Nickel 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 SPC Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Québec Nickel and SPC Nickel.
Diversification Opportunities for Québec Nickel and SPC Nickel
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Québec and SPC is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Qubec Nickel Corp and SPC Nickel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPC Nickel Corp 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 SPC Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPC Nickel Corp has no effect on the direction of Québec Nickel i.e., Québec Nickel and SPC Nickel go up and down completely randomly.
Pair Corralation between Québec Nickel and SPC Nickel
Assuming the 90 days horizon Qubec Nickel Corp is expected to generate 42.86 times more return on investment than SPC Nickel. However, Québec Nickel is 42.86 times more volatile than SPC Nickel Corp. It trades about 0.13 of its potential returns per unit of risk. SPC Nickel Corp is currently generating about -0.13 per unit of risk. If you would invest 1.75 in Qubec Nickel Corp on November 27, 2024 and sell it today you would earn a total of 4.69 from holding Qubec Nickel Corp or generate 268.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qubec Nickel Corp vs. SPC Nickel Corp
Performance |
| Timeline |
| Qubec Nickel Corp |
| SPC Nickel Corp |
Québec Nickel and SPC Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Québec Nickel and SPC Nickel
The main advantage of trading using opposite Québec Nickel and SPC Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Québec Nickel position performs unexpectedly, SPC Nickel 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 SPC Nickel will offset losses from the drop in SPC Nickel'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 |
| SPC Nickel vs. ZincX Resources Corp | SPC Nickel vs. Mundoro Capital | SPC Nickel vs. Strategic Resources | SPC Nickel vs. Norra Metals Corp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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