Correlation Between NioCorp Developments and Angkor Resources

Can any of the company-specific risk be diversified away by investing in both NioCorp Developments and Angkor Resources 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 NioCorp Developments and Angkor Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NioCorp Developments Ltd and Angkor Resources Corp, you can compare the effects of market volatilities on NioCorp Developments and Angkor Resources 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 NioCorp Developments with a short position of Angkor Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of NioCorp Developments and Angkor Resources.

Diversification Opportunities for NioCorp Developments and Angkor Resources

0.05

Correlation Coefficient

NioCorp Developments  Angkor Resources

Significant diversification

The 3 months correlation between NioCorp and Angkor is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding NioCorp Developments Ltd and Angkor Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angkor Resources Corp and NioCorp Developments 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 NioCorp Developments Ltd are associated (or correlated) with Angkor Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angkor Resources Corp has no effect on the direction of NioCorp Developments i.e., NioCorp Developments and Angkor Resources go up and down completely randomly.

Pair Corralation between NioCorp Developments and Angkor Resources

Allowing for the 90-day total investment horizon NioCorp Developments is expected to generate 2.35 times less return on investment than Angkor Resources. But when comparing it to its historical volatility, NioCorp Developments Ltd is 1.25 times less risky than Angkor Resources. It trades about 0.12 of its potential returns per unit of risk. Angkor Resources Corp is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  6.60  in Angkor Resources Corp on December 29, 2024 and sell it today you would earn a total of  9.40  from holding Angkor Resources Corp or generate 142.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

NioCorp Developments Ltd  vs.  Angkor Resources Corp

NioCorp Developments

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NioCorp Developments Ltd are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental drivers, NioCorp Developments sustained solid returns over the last few months and may actually be approaching a breakup point.

Angkor Resources Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Angkor Resources Corp are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Angkor Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NioCorp Developments and Angkor Resources

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

The idea behind NioCorp Developments Ltd and Angkor Resources 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.