Correlation Between South32 and Qubec Nickel
Can any of the company-specific risk be diversified away by investing in both South32 and Qubec 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 South32 and Qubec Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South32 Limited and Qubec Nickel Corp, you can compare the effects of market volatilities on South32 and Qubec 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 South32 with a short position of Qubec Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of South32 and Qubec Nickel.
Diversification Opportunities for South32 and Qubec Nickel
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between South32 and Qubec is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding South32 Limited and Qubec Nickel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qubec Nickel Corp and South32 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 South32 Limited are associated (or correlated) with Qubec Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qubec Nickel Corp has no effect on the direction of South32 i.e., South32 and Qubec Nickel go up and down completely randomly.
Pair Corralation between South32 and Qubec Nickel
Assuming the 90 days horizon South32 Limited is expected to under-perform the Qubec Nickel. But the pink sheet apears to be less risky and, when comparing its historical volatility, South32 Limited is 18.09 times less risky than Qubec Nickel. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Qubec Nickel Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 8.28 in Qubec Nickel Corp on September 13, 2024 and sell it today you would earn a total of 0.01 from holding Qubec Nickel Corp or generate 0.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
South32 Limited vs. Qubec Nickel Corp
Performance |
| Timeline |
| South32 Limited |
| Qubec Nickel Corp |
South32 and Qubec Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South32 and Qubec Nickel
The main advantage of trading using opposite South32 and Qubec Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South32 position performs unexpectedly, Qubec 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 Qubec Nickel will offset losses from the drop in Qubec Nickel's long position.| South32 vs. IGO Limited | South32 vs. Anglo American PLC | South32 vs. TNG Limited | South32 vs. Amarc Resources |
| Qubec Nickel vs. Norra Metals Corp | Qubec Nickel vs. E79 Resources Corp | Qubec Nickel vs. Voltage Metals Corp | Qubec Nickel vs. Cantex Mine Development |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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