Correlation Between Talon Metals and Nickel 28

Can any of the company-specific risk be diversified away by investing in both Talon Metals and Nickel 28 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 Talon Metals and Nickel 28 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Talon Metals Corp and Nickel 28 Capital, you can compare the effects of market volatilities on Talon Metals and Nickel 28 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 Talon Metals with a short position of Nickel 28. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talon Metals and Nickel 28.

Diversification Opportunities for Talon Metals and Nickel 28

-0.28

Correlation Coefficient

Talon Metals  Nickel 28

Very good diversification

The 3 months correlation between Talon and Nickel is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Talon Metals Corp and Nickel 28 Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nickel 28 Capital and Talon Metals 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 Talon Metals Corp are associated (or correlated) with Nickel 28. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nickel 28 Capital has no effect on the direction of Talon Metals i.e., Talon Metals and Nickel 28 go up and down completely randomly.

Pair Corralation between Talon Metals and Nickel 28

Assuming the 90 days trading horizon Talon Metals is expected to generate 1.38 times less return on investment than Nickel 28. In addition to that, Talon Metals is 2.71 times more volatile than Nickel 28 Capital. It trades about 0.02 of its total potential returns per unit of risk. Nickel 28 Capital is currently generating about 0.08 per unit of volatility. If you would invest  70.00  in Nickel 28 Capital on December 21, 2024 and sell it today you would earn a total of  8.00  from holding Nickel 28 Capital or generate 11.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Talon Metals Corp  vs.  Nickel 28 Capital

Talon Metals Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Talon Metals Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Talon Metals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Nickel 28 Capital

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nickel 28 Capital are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Nickel 28 showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Talon Metals and Nickel 28

The main advantage of trading using opposite Talon Metals and Nickel 28 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talon Metals position performs unexpectedly, Nickel 28 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 Nickel 28 will offset losses from the drop in Nickel 28's long position.

The idea behind Talon Metals Corp and Nickel 28 Capital 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.