Correlation Between Nouveau Monde and Sierra Metals

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

By analyzing existing cross correlation between Nouveau Monde Graphite and Sierra Metals, you can compare the effects of market volatilities on Nouveau Monde and Sierra 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 Nouveau Monde with a short position of Sierra Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nouveau Monde and Sierra Metals.

Diversification Opportunities for Nouveau Monde and Sierra Metals

0.0

Correlation Coefficient

Nouveau Monde  Sierra Metals

Pay attention - limited upside

The 3 months correlation between Nouveau and Sierra is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nouveau Monde Graphite and Sierra Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sierra Metals and Nouveau Monde 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 Nouveau Monde Graphite are associated (or correlated) with Sierra Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sierra Metals has no effect on the direction of Nouveau Monde i.e., Nouveau Monde and Sierra Metals go up and down completely randomly.

Pair Corralation between Nouveau Monde and Sierra Metals

If you would invest  157.00  in Nouveau Monde Graphite on December 29, 2024 and sell it today you would lose (6.00) from holding Nouveau Monde Graphite or give up 3.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Nouveau Monde Graphite  vs.  Sierra Metals

Nouveau Monde Graphite

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nouveau Monde Graphite are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Nouveau Monde may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Sierra Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sierra Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Sierra Metals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Nouveau Monde and Sierra Metals

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

The idea behind Nouveau Monde Graphite and Sierra Metals 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.