Correlation Between Vertical Exploration and SPC Nickel

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

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

Diversification Opportunities for Vertical Exploration and SPC Nickel

-0.03

Correlation Coefficient

Vertical Exploration  SPC Nickel

Good diversification

The 3 months correlation between Vertical and SPC is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Vertical Exploration 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 Vertical Exploration 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 Vertical Exploration 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 Vertical Exploration i.e., Vertical Exploration and SPC Nickel go up and down completely randomly.

Pair Corralation between Vertical Exploration and SPC Nickel

Assuming the 90 days horizon Vertical Exploration is expected to generate 0.03 times more return on investment than SPC Nickel. However, Vertical Exploration is 35.39 times less risky than SPC Nickel. It trades about 0.13 of its potential returns per unit of risk. SPC Nickel Corp is currently generating about -0.12 per unit of risk. If you would invest  2.43  in Vertical Exploration on December 29, 2024 and sell it today you would earn a total of  0.02  from holding Vertical Exploration or generate 0.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Vertical Exploration  vs.  SPC Nickel Corp

Vertical Exploration

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vertical Exploration are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Vertical Exploration is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

SPC Nickel Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPC Nickel Corp 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 basic 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 Vertical Exploration and SPC Nickel

The main advantage of trading using opposite Vertical Exploration and SPC Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vertical Exploration 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.

The idea behind Vertical Exploration and SPC 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.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.