Correlation Between Qubec Nickel and Sumitomo Metal
Can any of the company-specific risk be diversified away by investing in both Qubec Nickel and Sumitomo Metal 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 Qubec Nickel and Sumitomo Metal 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 Sumitomo Metal Mining, you can compare the effects of market volatilities on Qubec Nickel and Sumitomo Metal 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 Qubec Nickel with a short position of Sumitomo Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qubec Nickel and Sumitomo Metal.
Diversification Opportunities for Qubec Nickel and Sumitomo Metal
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Qubec and Sumitomo is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Qubec Nickel Corp and Sumitomo Metal Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Metal Mining and Qubec 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 Sumitomo Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Metal Mining has no effect on the direction of Qubec Nickel i.e., Qubec Nickel and Sumitomo Metal go up and down completely randomly.
Pair Corralation between Qubec Nickel and Sumitomo Metal
Assuming the 90 days horizon Qubec Nickel Corp is expected to generate 19.17 times more return on investment than Sumitomo Metal. However, Qubec Nickel is 19.17 times more volatile than Sumitomo Metal Mining. It trades about 0.08 of its potential returns per unit of risk. Sumitomo Metal Mining is currently generating about -0.04 per unit of risk. If you would invest 11.00 in Qubec Nickel Corp on September 12, 2024 and sell it today you would lose (2.71) from holding Qubec Nickel Corp or give up 24.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Qubec Nickel Corp vs. Sumitomo Metal Mining
Performance |
| Timeline |
| Qubec Nickel Corp |
| Sumitomo Metal Mining |
Qubec Nickel and Sumitomo Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qubec Nickel and Sumitomo Metal
The main advantage of trading using opposite Qubec Nickel and Sumitomo Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qubec Nickel position performs unexpectedly, Sumitomo Metal 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 Sumitomo Metal will offset losses from the drop in Sumitomo Metal's long position.| Qubec Nickel vs. Norra Metals Corp | Qubec Nickel vs. E79 Resources Corp | Qubec Nickel vs. Voltage Metals Corp | Qubec Nickel vs. Cantex Mine Development |
| Sumitomo Metal vs. Qubec Nickel Corp | Sumitomo Metal vs. IGO Limited | Sumitomo Metal vs. Focus Graphite | Sumitomo Metal vs. Mineral Res |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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