Correlation Between Lion Copper and Québec Nickel

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

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

Diversification Opportunities for Lion Copper and Québec Nickel

-0.61

Correlation Coefficient

Lion Copper  Québec Nickel

Excellent diversification

The 3 months correlation between Lion and Québec is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Lion Copper and and Qubec Nickel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qubec Nickel Corp and Lion Copper 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 Lion Copper and are associated (or correlated) with Québec Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qubec Nickel Corp has no effect on the direction of Lion Copper i.e., Lion Copper and Québec Nickel go up and down completely randomly.

Pair Corralation between Lion Copper and Québec Nickel

Assuming the 90 days horizon Lion Copper and is expected to generate 0.52 times more return on investment than Québec Nickel. However, Lion Copper and is 1.92 times less risky than Québec Nickel. It trades about 0.15 of its potential returns per unit of risk. Qubec Nickel Corp is currently generating about -0.03 per unit of risk. If you would invest  5.00  in Lion Copper and on December 28, 2024 and sell it today you would earn a total of  4.00  from holding Lion Copper and or generate 80.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Lion Copper and  vs.  Qubec Nickel Corp

Lion Copper

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lion Copper and are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak primary indicators, Lion Copper reported solid returns over the last few months and may actually be approaching a breakup point.

Qubec Nickel Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qubec Nickel Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental 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 Lion Copper and Québec Nickel

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

The idea behind Lion Copper and and Qubec 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.