Correlation Between Fathom Nickel and Nevada King

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

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

Diversification Opportunities for Fathom Nickel and Nevada King

0.64

Correlation Coefficient

Fathom Nickel  Nevada King

Poor diversification

The 3 months correlation between Fathom and Nevada is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Fathom Nickel and Nevada King Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nevada King Gold and Fathom 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 Fathom Nickel are associated (or correlated) with Nevada King. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nevada King Gold has no effect on the direction of Fathom Nickel i.e., Fathom Nickel and Nevada King go up and down completely randomly.

Pair Corralation between Fathom Nickel and Nevada King

If you would invest  33.00  in Nevada King Gold on September 12, 2024 and sell it today you would lose (13.00) from holding Nevada King Gold or give up 39.39% of portfolio value over 90 days.

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

Fathom Nickel  vs.  Nevada King Gold

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 latest fragile 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.

Nevada King Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nevada King Gold 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 technical and fundamental 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.

Pair Trading with Fathom Nickel and Nevada King

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

The idea behind Fathom Nickel and Nevada King Gold 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.