Correlation Between Québec Nickel and Silver Elephant

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

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

Diversification Opportunities for Québec Nickel and Silver Elephant

-0.25

Correlation Coefficient

Québec Nickel  Silver Elephant

Very good diversification

The 3 months correlation between Québec and Silver is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Qubec Nickel Corp and Silver Elephant Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Elephant Mining and Québec Nickel 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 Qubec Nickel Corp are associated (or correlated) with Silver Elephant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Elephant Mining has no effect on the direction of Québec Nickel i.e., Québec Nickel and Silver Elephant go up and down completely randomly.

Pair Corralation between Québec Nickel and Silver Elephant

Assuming the 90 days horizon Qubec Nickel Corp is expected to under-perform the Silver Elephant. In addition to that, Québec Nickel is 1.56 times more volatile than Silver Elephant Mining. It trades about -0.02 of its total potential returns per unit of risk. Silver Elephant Mining is currently generating about -0.01 per unit of volatility. If you would invest  25.00  in Silver Elephant Mining on December 29, 2024 and sell it today you would lose (10.00) from holding Silver Elephant Mining or give up 40.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Qubec Nickel Corp  vs.  Silver Elephant Mining

Qubec Nickel Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qubec Nickel Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Silver Elephant Mining

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Québec Nickel and Silver Elephant

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

The idea behind Qubec Nickel Corp and Silver Elephant Mining 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.