Correlation Between COL Financial and Nickel Asia

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Can any of the company-specific risk be diversified away by investing in both COL Financial and Nickel Asia 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 COL Financial and Nickel Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COL Financial Group and Nickel Asia Corp, you can compare the effects of market volatilities on COL Financial and Nickel Asia 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 COL Financial with a short position of Nickel Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of COL Financial and Nickel Asia.

Diversification Opportunities for COL Financial and Nickel Asia

COLNickelDiversified AwayCOLNickelDiversified Away100%
0.54
  Correlation Coefficient

Very weak diversification

The 3 months correlation between COL and Nickel is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding COL Financial Group and Nickel Asia Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nickel Asia Corp and COL Financial 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 COL Financial Group are associated (or correlated) with Nickel Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nickel Asia Corp has no effect on the direction of COL Financial i.e., COL Financial and Nickel Asia go up and down completely randomly.

Pair Corralation between COL Financial and Nickel Asia

Assuming the 90 days trading horizon COL Financial Group is expected to generate 1.11 times more return on investment than Nickel Asia. However, COL Financial is 1.11 times more volatile than Nickel Asia Corp. It trades about -0.02 of its potential returns per unit of risk. Nickel Asia Corp is currently generating about -0.06 per unit of risk. If you would invest  178.00  in COL Financial Group on October 20, 2024 and sell it today you would lose (8.00) from holding COL Financial Group or give up 4.49% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy98.33%
ValuesDaily Returns

COL Financial Group  vs.  Nickel Asia Corp

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -20-15-10-50510
JavaScript chart by amCharts 3.21.15COL NIKL
       Timeline  
COL Financial Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days COL Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, COL Financial is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1.61.71.81.922.1
Nickel Asia Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Nickel Asia Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan33.13.23.33.43.53.6

COL Financial and Nickel Asia Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.95-2.96-1.97-0.980.00.991.982.973.95 0.0500.0550.0600.0650.0700.075
JavaScript chart by amCharts 3.21.15COL NIKL
       Returns  

Pair Trading with COL Financial and Nickel Asia

The main advantage of trading using opposite COL Financial and Nickel Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COL Financial position performs unexpectedly, Nickel Asia 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 Asia will offset losses from the drop in Nickel Asia's long position.
The idea behind COL Financial Group and Nickel Asia 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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