Correlation Between Adriatic Metals and Nickel Mines
Can any of the company-specific risk be diversified away by investing in both Adriatic Metals 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 Adriatic Metals and Nickel Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adriatic Metals PLC and Nickel Mines Limited, you can compare the effects of market volatilities on Adriatic Metals 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 Adriatic Metals with a short position of Nickel Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adriatic Metals and Nickel Mines.
Diversification Opportunities for Adriatic Metals and Nickel Mines
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Adriatic and Nickel is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Adriatic Metals PLC 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 Adriatic Metals 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 Adriatic Metals PLC 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 Adriatic Metals i.e., Adriatic Metals and Nickel Mines go up and down completely randomly.
Pair Corralation between Adriatic Metals and Nickel Mines
Assuming the 90 days horizon Adriatic Metals PLC is expected to generate 1.02 times more return on investment than Nickel Mines. However, Adriatic Metals is 1.02 times more volatile than Nickel Mines Limited. It trades about 0.12 of its potential returns per unit of risk. Nickel Mines Limited is currently generating about -0.03 per unit of risk. If you would invest 214.00 in Adriatic Metals PLC on September 12, 2024 and sell it today you would earn a total of 48.00 from holding Adriatic Metals PLC or generate 22.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Adriatic Metals PLC vs. Nickel Mines Limited
Performance |
Timeline |
Adriatic Metals PLC |
Nickel Mines Limited |
Adriatic Metals and Nickel Mines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Adriatic Metals and Nickel Mines
The main advantage of trading using opposite Adriatic Metals and Nickel Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adriatic Metals 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.Adriatic Metals vs. Huntsman Exploration | Adriatic Metals vs. Aurelia Metals Limited | Adriatic Metals vs. American Helium | Adriatic Metals vs. Progressive Planet Solutions |
Nickel Mines vs. Qubec Nickel Corp | Nickel Mines vs. IGO Limited | Nickel Mines vs. Focus Graphite | Nickel Mines vs. Mineral Res |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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