Correlation Between Canada Nickel and SPC Nickel
Can any of the company-specific risk be diversified away by investing in both Canada Nickel 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 Canada Nickel and SPC Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canada Nickel and SPC Nickel Corp, you can compare the effects of market volatilities on Canada Nickel 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 Canada Nickel with a short position of SPC Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canada Nickel and SPC Nickel.
Diversification Opportunities for Canada Nickel and SPC Nickel
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canada and SPC is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Canada Nickel 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 Canada 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 Canada Nickel 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 Canada Nickel i.e., Canada Nickel and SPC Nickel go up and down completely randomly.
Pair Corralation between Canada Nickel and SPC Nickel
Assuming the 90 days horizon Canada Nickel is expected to generate 1.03 times more return on investment than SPC Nickel. However, Canada Nickel is 1.03 times more volatile than SPC Nickel Corp. It trades about 0.08 of its potential returns per unit of risk. SPC Nickel Corp is currently generating about -0.13 per unit of risk. If you would invest 63.00 in Canada Nickel on December 28, 2024 and sell it today you would earn a total of 9.00 from holding Canada Nickel or generate 14.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
Canada Nickel vs. SPC Nickel Corp
Performance |
Timeline |
Canada Nickel |
SPC Nickel Corp |
Canada Nickel and SPC Nickel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Canada Nickel and SPC Nickel
The main advantage of trading using opposite Canada Nickel and SPC Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canada Nickel 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.Canada Nickel vs. Nobel Resources Corp | Canada Nickel vs. SPC Nickel Corp | Canada Nickel vs. Lotus Resources Limited | Canada Nickel vs. Ardea Resources Limited |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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