Correlation Between Gratomic and Québec Nickel

Can any of the company-specific risk be diversified away by investing in both Gratomic and Québec 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 Gratomic and Québec Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gratomic and Qubec Nickel Corp, you can compare the effects of market volatilities on Gratomic and Québec 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 Gratomic with a short position of Québec Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gratomic and Québec Nickel.

Diversification Opportunities for Gratomic and Québec Nickel

0.45

Correlation Coefficient

Gratomic  Québec Nickel

Very weak diversification

The 3 months correlation between Gratomic and Québec is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Gratomic and Qubec Nickel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qubec Nickel Corp and Gratomic 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 Gratomic are associated (or correlated) with Québec Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qubec Nickel Corp has no effect on the direction of Gratomic i.e., Gratomic and Québec Nickel go up and down completely randomly.

Pair Corralation between Gratomic and Québec Nickel

Assuming the 90 days horizon Gratomic is expected to under-perform the Québec Nickel. But the pink sheet apears to be less risky and, when comparing its historical volatility, Gratomic is 2.48 times less risky than Québec Nickel. The pink sheet trades about -0.07 of its potential returns per unit of risk. The Qubec Nickel Corp is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  8.45  in Qubec Nickel Corp on December 27, 2024 and sell it today you would lose (6.35) from holding Qubec Nickel Corp or give up 75.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Gratomic  vs.  Qubec Nickel Corp

Gratomic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gratomic has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Qubec Nickel Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qubec Nickel Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Gratomic and Québec Nickel

The main advantage of trading using opposite Gratomic and Québec Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gratomic position performs unexpectedly, Québec 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 Québec Nickel will offset losses from the drop in Québec Nickel's long position.

The idea behind Gratomic and Qubec Nickel Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.