Correlation Between Nickel Asia and Dizon Copper

Can any of the company-specific risk be diversified away by investing in both Nickel Asia and Dizon Copper 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 Dizon Copper 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 Dizon Copper Silver, you can compare the effects of market volatilities on Nickel Asia and Dizon Copper 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 Dizon Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nickel Asia and Dizon Copper.

Diversification Opportunities for Nickel Asia and Dizon Copper

0.23

Correlation Coefficient

Nickel Asia  Dizon Copper

Modest diversification

The 3 months correlation between Nickel and Dizon is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Nickel Asia Corp and Dizon Copper Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dizon Copper Silver 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 Dizon Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dizon Copper Silver has no effect on the direction of Nickel Asia i.e., Nickel Asia and Dizon Copper go up and down completely randomly.

Pair Corralation between Nickel Asia and Dizon Copper

Assuming the 90 days trading horizon Nickel Asia Corp is expected to under-perform the Dizon Copper. But the stock apears to be less risky and, when comparing its historical volatility, Nickel Asia Corp is 1.65 times less risky than Dizon Copper. The stock trades about -0.09 of its potential returns per unit of risk. The Dizon Copper Silver is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  201.00  in Dizon Copper Silver on December 4, 2024 and sell it today you would earn a total of  9.00  from holding Dizon Copper Silver or generate 4.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	35.59%
Values	Daily Returns

Nickel Asia Corp  vs.  Dizon Copper Silver

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 uncertain 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.

Dizon Copper Silver

Risk-Adjusted Performance

Insignificant

Over the last 90 days Dizon Copper Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather unsteady technical and fundamental indicators, Dizon Copper exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nickel Asia and Dizon Copper

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

The idea behind Nickel Asia Corp and Dizon Copper Silver 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.