Correlation Between SPC Nickel and LithiumBank Resources
Can any of the company-specific risk be diversified away by investing in both SPC Nickel and LithiumBank 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 SPC Nickel and LithiumBank Resources 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 LithiumBank Resources Corp, you can compare the effects of market volatilities on SPC Nickel and LithiumBank 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 SPC Nickel with a short position of LithiumBank Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPC Nickel and LithiumBank Resources.
Diversification Opportunities for SPC Nickel and LithiumBank Resources
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SPC and LithiumBank is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding SPC Nickel Corp and LithiumBank Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LithiumBank Resources 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 LithiumBank Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LithiumBank Resources has no effect on the direction of SPC Nickel i.e., SPC Nickel and LithiumBank Resources go up and down completely randomly.
Pair Corralation between SPC Nickel and LithiumBank Resources
Assuming the 90 days horizon SPC Nickel Corp is expected to generate 3.71 times more return on investment than LithiumBank Resources. However, SPC Nickel is 3.71 times more volatile than LithiumBank Resources Corp. It trades about 0.05 of its potential returns per unit of risk. LithiumBank Resources Corp is currently generating about -0.03 per unit of risk. If you would invest 4.76 in SPC Nickel Corp on September 3, 2024 and sell it today you would lose (3.36) from holding SPC Nickel Corp or give up 70.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
SPC Nickel Corp vs. LithiumBank Resources Corp
Performance |
| Timeline |
| SPC Nickel Corp |
| LithiumBank Resources |
SPC Nickel and LithiumBank Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPC Nickel and LithiumBank Resources
The main advantage of trading using opposite SPC Nickel and LithiumBank Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPC Nickel position performs unexpectedly, LithiumBank 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 LithiumBank Resources will offset losses from the drop in LithiumBank Resources' long position.| SPC Nickel vs. Qubec Nickel Corp | SPC Nickel vs. IGO Limited | SPC Nickel vs. Anson Resources Limited | SPC Nickel vs. Avarone Metals |
| LithiumBank Resources vs. Qubec Nickel Corp | LithiumBank Resources vs. IGO Limited | LithiumBank Resources vs. Anson Resources Limited | LithiumBank Resources vs. Avarone Metals |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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