Correlation Between South Star and SPC Nickel
Can any of the company-specific risk be diversified away by investing in both South Star and SPC Nickel 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 South Star and SPC Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South Star Battery and SPC Nickel Corp, you can compare the effects of market volatilities on South Star and SPC Nickel 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 South Star with a short position of SPC Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Star and SPC Nickel.
Diversification Opportunities for South Star and SPC Nickel
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between South and SPC is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding South Star Battery and SPC Nickel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPC Nickel Corp and South Star 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 South Star Battery are associated (or correlated) with SPC Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPC Nickel Corp has no effect on the direction of South Star i.e., South Star and SPC Nickel go up and down completely randomly.
Pair Corralation between South Star and SPC Nickel
Assuming the 90 days horizon South Star Battery is expected to generate 0.64 times more return on investment than SPC Nickel. However, South Star Battery is 1.57 times less risky than SPC Nickel. It trades about 0.06 of its potential returns per unit of risk. SPC Nickel Corp is currently generating about -0.26 per unit of risk. If you would invest 40.00 in South Star Battery on August 25, 2024 and sell it today you would earn a total of 3.00 from holding South Star Battery or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
South Star Battery vs. SPC Nickel Corp
Performance |
| Timeline |
| South Star Battery |
| SPC Nickel Corp |
South Star and SPC Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Star and SPC Nickel
The main advantage of trading using opposite South Star and SPC Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Star position performs unexpectedly, SPC Nickel 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 SPC Nickel will offset losses from the drop in SPC Nickel's long position.| South Star vs. Norra Metals Corp | South Star vs. ZincX Resources Corp | South Star vs. Nuinsco Resources Limited | South Star vs. Mundoro Capital |
| SPC Nickel vs. Norra Metals Corp | SPC Nickel vs. ZincX Resources Corp | SPC Nickel vs. Nuinsco Resources Limited | SPC Nickel vs. South Star Battery |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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