Correlation Between York Harbour and Fathom Nickel

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

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

Diversification Opportunities for York Harbour and Fathom Nickel

-0.43

Correlation Coefficient

York Harbour  Fathom Nickel

Very good diversification

The 3 months correlation between York and Fathom is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding York Harbour Metals and Fathom Nickel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fathom Nickel and York Harbour 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 York Harbour Metals are associated (or correlated) with Fathom Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fathom Nickel has no effect on the direction of York Harbour i.e., York Harbour and Fathom Nickel go up and down completely randomly.

Pair Corralation between York Harbour and Fathom Nickel

Assuming the 90 days horizon York Harbour Metals is expected to generate 3.31 times more return on investment than Fathom Nickel. However, York Harbour is 3.31 times more volatile than Fathom Nickel. It trades about 0.07 of its potential returns per unit of risk. Fathom Nickel is currently generating about -0.05 per unit of risk. If you would invest  5.00  in York Harbour Metals on September 1, 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 Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

York Harbour Metals  vs.  Fathom Nickel

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.

Fathom Nickel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fathom Nickel 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 fundamental indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with York Harbour and Fathom Nickel

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

The idea behind York Harbour Metals and Fathom Nickel 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.