Correlation Between SPC Nickel and Faraday Copper
Can any of the company-specific risk be diversified away by investing in both SPC Nickel and Faraday Copper 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 SPC Nickel and Faraday Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPC Nickel Corp and Faraday Copper Corp, you can compare the effects of market volatilities on SPC Nickel and Faraday Copper 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 SPC Nickel with a short position of Faraday Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPC Nickel and Faraday Copper.
Diversification Opportunities for SPC Nickel and Faraday Copper
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between SPC and Faraday is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding SPC Nickel Corp and Faraday Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Faraday Copper Corp and SPC 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 SPC Nickel Corp are associated (or correlated) with Faraday Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Faraday Copper Corp has no effect on the direction of SPC Nickel i.e., SPC Nickel and Faraday Copper go up and down completely randomly.
Pair Corralation between SPC Nickel and Faraday Copper
Assuming the 90 days horizon SPC Nickel is expected to generate 1.24 times less return on investment than Faraday Copper. In addition to that, SPC Nickel is 2.15 times more volatile than Faraday Copper Corp. It trades about 0.01 of its total potential returns per unit of risk. Faraday Copper Corp is currently generating about 0.04 per unit of volatility. If you would invest 54.00 in Faraday Copper Corp on September 12, 2024 and sell it today you would earn a total of 23.00 from holding Faraday Copper Corp or generate 42.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPC Nickel Corp vs. Faraday Copper Corp
Performance |
| Timeline |
| SPC Nickel Corp |
| Faraday Copper Corp |
SPC Nickel and Faraday Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPC Nickel and Faraday Copper
The main advantage of trading using opposite SPC Nickel and Faraday Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPC Nickel position performs unexpectedly, Faraday Copper 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 Faraday Copper will offset losses from the drop in Faraday Copper's long position.| SPC Nickel vs. Magna Mining | SPC Nickel vs. Transition Metals Corp | SPC Nickel vs. Power Nickel | SPC Nickel vs. FPX Nickel Corp |
| Faraday Copper vs. Ressources Minieres Radisson | Faraday Copper vs. Galantas Gold Corp | Faraday Copper vs. Red Pine Exploration | Faraday Copper vs. Kore Mining |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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