Correlation Between StrikePoint Gold and Nickel Mines
Can any of the company-specific risk be diversified away by investing in both StrikePoint Gold and Nickel Mines 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 StrikePoint Gold and Nickel Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between StrikePoint Gold and Nickel Mines Limited, you can compare the effects of market volatilities on StrikePoint Gold and Nickel Mines 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 StrikePoint Gold with a short position of Nickel Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of StrikePoint Gold and Nickel Mines.
Diversification Opportunities for StrikePoint Gold and Nickel Mines
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between StrikePoint and Nickel is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding StrikePoint Gold and Nickel Mines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nickel Mines Limited and StrikePoint Gold 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 StrikePoint Gold are associated (or correlated) with Nickel Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nickel Mines Limited has no effect on the direction of StrikePoint Gold i.e., StrikePoint Gold and Nickel Mines go up and down completely randomly.
Pair Corralation between StrikePoint Gold and Nickel Mines
Assuming the 90 days horizon StrikePoint Gold is expected to generate 38.39 times more return on investment than Nickel Mines. However, StrikePoint Gold is 38.39 times more volatile than Nickel Mines Limited. It trades about 0.16 of its potential returns per unit of risk. Nickel Mines Limited is currently generating about 0.05 per unit of risk. If you would invest 41.00 in StrikePoint Gold on September 1, 2024 and sell it today you would lose (26.00) from holding StrikePoint Gold or give up 63.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
StrikePoint Gold vs. Nickel Mines Limited
Performance |
| Timeline |
| StrikePoint Gold |
| Nickel Mines Limited |
StrikePoint Gold and Nickel Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with StrikePoint Gold and Nickel Mines
The main advantage of trading using opposite StrikePoint Gold and Nickel Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if StrikePoint Gold position performs unexpectedly, Nickel Mines 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 Nickel Mines will offset losses from the drop in Nickel Mines' long position.| StrikePoint Gold vs. ATT Inc | StrikePoint Gold vs. Merck Company | StrikePoint Gold vs. Walt Disney | StrikePoint Gold vs. Caterpillar |
| Nickel Mines vs. IGO Limited | Nickel Mines vs. Qubec Nickel Corp | Nickel Mines vs. Mineral Resources Limited | Nickel Mines vs. Surge Copper 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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