Correlation Between Norra Metals and NorthIsle Copper

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

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

Diversification Opportunities for Norra Metals and NorthIsle Copper

0.0

Correlation Coefficient

Norra Metals  NorthIsle Copper

Pay attention - limited upside

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

Pair Corralation between Norra Metals and NorthIsle Copper

If you would invest  1.00  in Norra Metals Corp on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Norra Metals Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Norra Metals Corp  vs.  NorthIsle Copper and

Norra Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

NorthIsle Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NorthIsle Copper and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Norra Metals and NorthIsle Copper

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

The idea behind Norra Metals Corp and NorthIsle Copper and 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.