Correlation Between Sassy Resources and Québec Nickel
Can any of the company-specific risk be diversified away by investing in both Sassy Resources and Québec Nickel 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 Sassy Resources and Québec Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sassy Resources and Qubec Nickel Corp, you can compare the effects of market volatilities on Sassy Resources and Québec Nickel 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 Sassy Resources with a short position of Québec Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sassy Resources and Québec Nickel.
Diversification Opportunities for Sassy Resources and Québec Nickel
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sassy and Québec is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sassy Resources and Qubec Nickel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qubec Nickel Corp and Sassy Resources 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 Sassy Resources are associated (or correlated) with Québec Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qubec Nickel Corp has no effect on the direction of Sassy Resources i.e., Sassy Resources and Québec Nickel go up and down completely randomly.
Pair Corralation between Sassy Resources and Québec Nickel
Assuming the 90 days horizon Sassy Resources is expected to generate 9.3 times less return on investment than Québec Nickel. But when comparing it to its historical volatility, Sassy Resources is 6.95 times less risky than Québec Nickel. It trades about 0.1 of its potential returns per unit of risk. Qubec Nickel Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1.75 in Qubec Nickel Corp on December 3, 2024 and sell it today you would earn a total of 4.69 from holding Qubec Nickel Corp or generate 268.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Sassy Resources vs. Qubec Nickel Corp
Performance |
Timeline |
Sassy Resources |
Qubec Nickel Corp |
Sassy Resources and Québec Nickel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sassy Resources and Québec Nickel
The main advantage of trading using opposite Sassy Resources and Québec Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sassy Resources position performs unexpectedly, Québec Nickel 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 Québec Nickel will offset losses from the drop in Québec Nickel's long position.Sassy Resources vs. Pan Global Resources | Sassy Resources vs. Tower Resources | Sassy Resources vs. Metals X Limited | Sassy Resources vs. Nevada King Gold |
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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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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