Correlation Between SPC Nickel and Magna Mining
Can any of the company-specific risk be diversified away by investing in both SPC Nickel and Magna Mining 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 SPC Nickel and Magna Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPC Nickel Corp and Magna Mining, you can compare the effects of market volatilities on SPC Nickel and Magna Mining 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 SPC Nickel with a short position of Magna Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPC Nickel and Magna Mining.
Diversification Opportunities for SPC Nickel and Magna Mining
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between SPC and Magna is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding SPC Nickel Corp and Magna Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna Mining and SPC 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 SPC Nickel Corp are associated (or correlated) with Magna Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna Mining has no effect on the direction of SPC Nickel i.e., SPC Nickel and Magna Mining go up and down completely randomly.
Pair Corralation between SPC Nickel and Magna Mining
Assuming the 90 days horizon SPC Nickel Corp is expected to under-perform the Magna Mining. But the pink sheet apears to be less risky and, when comparing its historical volatility, SPC Nickel Corp is 1.08 times less risky than Magna Mining. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Magna Mining is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 96.00 in Magna Mining on December 27, 2024 and sell it today you would earn a total of 23.00 from holding Magna Mining or generate 23.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
SPC Nickel Corp vs. Magna Mining
Performance |
Timeline |
SPC Nickel Corp |
Magna Mining |
SPC Nickel and Magna Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SPC Nickel and Magna Mining
The main advantage of trading using opposite SPC Nickel and Magna Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPC Nickel position performs unexpectedly, Magna Mining 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 Magna Mining will offset losses from the drop in Magna Mining's long position.SPC Nickel vs. ZincX Resources Corp | SPC Nickel vs. Mundoro Capital | SPC Nickel vs. Strategic Resources | SPC Nickel vs. Norra Metals Corp |
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Check out your portfolio center.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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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