Correlation Between Skeena Resources and Nexa Resources
Can any of the company-specific risk be diversified away by investing in both Skeena Resources and Nexa Resources 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 Skeena Resources and Nexa Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skeena Resources and Nexa Resources SA, you can compare the effects of market volatilities on Skeena Resources and Nexa Resources 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 Skeena Resources with a short position of Nexa Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skeena Resources and Nexa Resources.
Diversification Opportunities for Skeena Resources and Nexa Resources
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Skeena and Nexa is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Skeena Resources and Nexa Resources SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexa Resources SA and Skeena Resources 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 Skeena Resources are associated (or correlated) with Nexa Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexa Resources SA has no effect on the direction of Skeena Resources i.e., Skeena Resources and Nexa Resources go up and down completely randomly.
Pair Corralation between Skeena Resources and Nexa Resources
Considering the 90-day investment horizon Skeena Resources is expected to generate 1.42 times more return on investment than Nexa Resources. However, Skeena Resources is 1.42 times more volatile than Nexa Resources SA. It trades about 0.05 of its potential returns per unit of risk. Nexa Resources SA is currently generating about 0.04 per unit of risk. If you would invest 554.00 in Skeena Resources on August 25, 2024 and sell it today you would earn a total of 380.00 from holding Skeena Resources or generate 68.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skeena Resources vs. Nexa Resources SA
Performance |
| Timeline |
| Skeena Resources |
| Nexa Resources SA |
Skeena Resources and Nexa Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skeena Resources and Nexa Resources
The main advantage of trading using opposite Skeena Resources and Nexa Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skeena Resources position performs unexpectedly, Nexa Resources 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 Nexa Resources will offset losses from the drop in Nexa Resources' long position.| Skeena Resources vs. Materion | Skeena Resources vs. Compass Minerals International | Skeena Resources vs. IperionX Limited American | Skeena Resources vs. EMX Royalty Corp |
| Nexa Resources vs. Materion | Nexa Resources vs. Fury Gold Mines | Nexa Resources vs. Eskay Mining Corp | Nexa Resources vs. EMX Royalty 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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