Correlation Between Nickel 28 and Giga Metals

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

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

Diversification Opportunities for Nickel 28 and Giga Metals

0.35

Correlation Coefficient

Nickel 28  Giga Metals

Weak diversification

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

Pair Corralation between Nickel 28 and Giga Metals

Assuming the 90 days horizon Nickel 28 Capital is expected to generate 0.7 times more return on investment than Giga Metals. However, Nickel 28 Capital is 1.42 times less risky than Giga Metals. It trades about 0.08 of its potential returns per unit of risk. Giga Metals Corp is currently generating about -0.02 per unit of risk. 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

Nickel 28 Capital  vs.  Giga Metals Corp

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.

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.

Pair Trading with Nickel 28 and Giga Metals

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

The idea behind Nickel 28 Capital and Giga Metals 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..