Correlation Between Québec Nickel and York Harbour

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

Diversification Opportunities for Québec Nickel and York Harbour

0.07

Correlation Coefficient

Québec Nickel  York Harbour

Significant diversification

The 3 months correlation between Québec and York is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Qubec Nickel Corp and York Harbour Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on York Harbour Metals 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 York Harbour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of York Harbour Metals has no effect on the direction of Québec Nickel i.e., Québec Nickel and York Harbour go up and down completely randomly.

Pair Corralation between Québec Nickel and York Harbour

Assuming the 90 days horizon Qubec Nickel Corp is expected to under-perform the York Harbour. But the otc stock apears to be less risky and, when comparing its historical volatility, Qubec Nickel Corp is 1.58 times less risky than York Harbour. The otc stock trades about -0.01 of its potential returns per unit of risk. The York Harbour Metals is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  5.00  in York Harbour Metals on September 3, 2024 and sell it today you would lose (1.94) from holding York Harbour Metals or give up 38.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Qubec Nickel Corp  vs.  York Harbour Metals

Qubec Nickel Corp

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

York Harbour Metals

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in York Harbour Metals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, York Harbour reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Québec Nickel and York Harbour

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

The idea behind Qubec Nickel Corp and York Harbour 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.