Correlation Between Flying Nickel and Callinex Mines

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

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

Diversification Opportunities for Flying Nickel and Callinex Mines

0.26

Correlation Coefficient

Flying Nickel  Callinex Mines

Modest diversification

The 3 months correlation between Flying and Callinex is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Flying Nickel Mining and Callinex Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Callinex Mines and Flying 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 Flying Nickel Mining are associated (or correlated) with Callinex Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Callinex Mines has no effect on the direction of Flying Nickel i.e., Flying Nickel and Callinex Mines go up and down completely randomly.

Pair Corralation between Flying Nickel and Callinex Mines

Assuming the 90 days horizon Flying Nickel Mining is expected to generate 2.7 times more return on investment than Callinex Mines. However, Flying Nickel is 2.7 times more volatile than Callinex Mines. It trades about 0.05 of its potential returns per unit of risk. Callinex Mines is currently generating about 0.05 per unit of risk. If you would invest  2.66  in Flying Nickel Mining on December 30, 2024 and sell it today you would earn a total of  0.00  from holding Flying Nickel Mining or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	29.03%
Values	Daily Returns

Flying Nickel Mining  vs.  Callinex Mines

Flying Nickel Mining

Risk-Adjusted Performance

Insignificant

Over the last 90 days Flying Nickel Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Flying Nickel reported solid returns over the last few months and may actually be approaching a breakup point.

Callinex Mines

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Callinex Mines are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Callinex Mines may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Flying Nickel and Callinex Mines

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

The idea behind Flying Nickel Mining and Callinex Mines 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.