Correlation Between St-Georges Eco-Mining and Québec Nickel

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

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

Diversification Opportunities for St-Georges Eco-Mining and Québec Nickel

0.05

Correlation Coefficient

St-Georges Eco-Mining  Québec Nickel

Significant diversification

The 3 months correlation between St-Georges and Québec is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding St Georges Eco Mining Corp 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 St-Georges Eco-Mining 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 St Georges Eco Mining Corp 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 St-Georges Eco-Mining i.e., St-Georges Eco-Mining and Québec Nickel go up and down completely randomly.

Pair Corralation between St-Georges Eco-Mining and Québec Nickel

Assuming the 90 days horizon St Georges Eco Mining Corp is expected to under-perform the Québec Nickel. But the otc stock apears to be less risky and, when comparing its historical volatility, St Georges Eco Mining Corp is 1.65 times less risky than Québec Nickel. The otc stock trades about -0.04 of its potential returns per unit of risk. The Qubec Nickel Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  8.00  in Qubec Nickel Corp on September 4, 2024 and sell it today you would lose (6.25) from holding Qubec Nickel Corp or give up 78.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

St Georges Eco Mining Corp  vs.  Qubec Nickel Corp

St-Georges Eco-Mining

Risk-Adjusted Performance

0 of 100

Very Weak

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

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.

Pair Trading with St-Georges Eco-Mining and Québec Nickel

The main advantage of trading using opposite St-Georges Eco-Mining and Québec Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St-Georges Eco-Mining 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.

The idea behind St Georges Eco Mining Corp and Qubec Nickel Corp 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.