Correlation Between SPC Nickel and Noram Lithium
Can any of the company-specific risk be diversified away by investing in both SPC Nickel and Noram Lithium 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 Noram Lithium 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 Noram Lithium Corp, you can compare the effects of market volatilities on SPC Nickel and Noram Lithium 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 Noram Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPC Nickel and Noram Lithium.
Diversification Opportunities for SPC Nickel and Noram Lithium
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between SPC and Noram is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding SPC Nickel Corp and Noram Lithium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noram Lithium 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 Noram Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noram Lithium Corp has no effect on the direction of SPC Nickel i.e., SPC Nickel and Noram Lithium go up and down completely randomly.
Pair Corralation between SPC Nickel and Noram Lithium
Assuming the 90 days horizon SPC Nickel Corp is expected to under-perform the Noram Lithium. In addition to that, SPC Nickel is 2.01 times more volatile than Noram Lithium Corp. It trades about -0.38 of its total potential returns per unit of risk. Noram Lithium Corp is currently generating about -0.05 per unit of volatility. If you would invest 9.80 in Noram Lithium Corp on August 29, 2024 and sell it today you would lose (0.80) from holding Noram Lithium Corp or give up 8.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SPC Nickel Corp vs. Noram Lithium Corp
Performance |
| Timeline |
| SPC Nickel Corp |
| Noram Lithium Corp |
SPC Nickel and Noram Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPC Nickel and Noram Lithium
The main advantage of trading using opposite SPC Nickel and Noram Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPC Nickel position performs unexpectedly, Noram Lithium 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 Noram Lithium will offset losses from the drop in Noram Lithium's long position.| SPC Nickel vs. Rockridge Resources | SPC Nickel vs. Ameriwest Lithium | SPC Nickel vs. Osisko Metals Incorporated | SPC Nickel vs. Volt Lithium Corp |
| Noram Lithium vs. Anson Resources Limited | Noram Lithium vs. Aurelia Metals Limited | Noram Lithium vs. Altura Mining Limited | Noram Lithium vs. Australian Vanadium Limited |
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 CEOs Directory module to screen CEOs from public companies around the world.
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