Correlation Between Giga Metals and Nickel 28

Can any of the company-specific risk be diversified away by investing in both Giga Metals and Nickel 28 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 Giga Metals and Nickel 28 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Giga Metals Corp and Nickel 28 Capital, you can compare the effects of market volatilities on Giga Metals and Nickel 28 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 Giga Metals with a short position of Nickel 28. Check out your portfolio center. Please also check ongoing floating volatility patterns of Giga Metals and Nickel 28.

Diversification Opportunities for Giga Metals and Nickel 28

0.35

Correlation Coefficient

Giga Metals  Nickel 28

Weak diversification

The 3 months correlation between Giga and Nickel is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Giga Metals Corp and Nickel 28 Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nickel 28 Capital and Giga Metals 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 Giga Metals Corp are associated (or correlated) with Nickel 28. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nickel 28 Capital has no effect on the direction of Giga Metals i.e., Giga Metals and Nickel 28 go up and down completely randomly.

Pair Corralation between Giga Metals and Nickel 28

Assuming the 90 days trading horizon Giga Metals Corp is expected to under-perform the Nickel 28. In addition to that, Giga Metals is 1.42 times more volatile than Nickel 28 Capital. It trades about -0.02 of its total potential returns per unit of risk. Nickel 28 Capital is currently generating about 0.08 per unit of volatility. If you would invest  70.00  in Nickel 28 Capital on December 21, 2024 and sell it today you would earn a total of  8.00  from holding Nickel 28 Capital or generate 11.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Giga Metals Corp  vs.  Nickel 28 Capital

Giga Metals Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Giga Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Giga Metals is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Nickel 28 Capital

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nickel 28 Capital are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Nickel 28 showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Giga Metals and Nickel 28

The main advantage of trading using opposite Giga Metals and Nickel 28 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Giga Metals position performs unexpectedly, Nickel 28 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 28 will offset losses from the drop in Nickel 28's long position.

The idea behind Giga Metals Corp and Nickel 28 Capital 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 Transaction History module to view history of all your transactions and understand their impact on performance.