Correlation Between Nickel Asia and Benguet Corp

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

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

Diversification Opportunities for Nickel Asia and Benguet Corp

-0.31

Correlation Coefficient

Nickel Asia  Benguet Corp

Very good diversification

The 3 months correlation between Nickel and Benguet is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Nickel Asia Corp and Benguet Corp A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benguet Corp A and Nickel Asia 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 Nickel Asia Corp are associated (or correlated) with Benguet Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benguet Corp A has no effect on the direction of Nickel Asia i.e., Nickel Asia and Benguet Corp go up and down completely randomly.

Pair Corralation between Nickel Asia and Benguet Corp

Assuming the 90 days trading horizon Nickel Asia Corp is expected to under-perform the Benguet Corp. But the stock apears to be less risky and, when comparing its historical volatility, Nickel Asia Corp is 1.03 times less risky than Benguet Corp. The stock trades about -0.13 of its potential returns per unit of risk. The Benguet Corp A is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  390.00  in Benguet Corp A on December 28, 2024 and sell it today you would lose (20.00) from holding Benguet Corp A or give up 5.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.25%
Values	Daily Returns

Nickel Asia Corp  vs.  Benguet Corp A

Nickel Asia Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nickel Asia Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Benguet Corp A

Risk-Adjusted Performance

Very Weak

Over the last 90 days Benguet Corp A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Benguet Corp is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Nickel Asia and Benguet Corp

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

The idea behind Nickel Asia Corp and Benguet Corp A 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.