Correlation Between Klondike Silver and Canada Nickel
Can any of the company-specific risk be diversified away by investing in both Klondike Silver and Canada 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 Klondike Silver and Canada Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Klondike Silver Corp and Canada Nickel, you can compare the effects of market volatilities on Klondike Silver and Canada 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 Klondike Silver with a short position of Canada Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Klondike Silver and Canada Nickel.
Diversification Opportunities for Klondike Silver and Canada Nickel
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Klondike and Canada is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Klondike Silver Corp and Canada Nickel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Nickel and Klondike Silver 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 Klondike Silver Corp are associated (or correlated) with Canada Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canada Nickel has no effect on the direction of Klondike Silver i.e., Klondike Silver and Canada Nickel go up and down completely randomly.
Pair Corralation between Klondike Silver and Canada Nickel
Given the investment horizon of 90 days Klondike Silver Corp is expected to under-perform the Canada Nickel. In addition to that, Klondike Silver is 3.91 times more volatile than Canada Nickel. It trades about -0.04 of its total potential returns per unit of risk. Canada Nickel is currently generating about -0.13 per unit of volatility. If you would invest 113.00 in Canada Nickel on September 26, 2024 and sell it today you would lose (20.00) from holding Canada Nickel or give up 17.7% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Klondike Silver Corp vs. Canada Nickel
Performance |
Timeline |
Klondike Silver Corp |
Canada Nickel |
Klondike Silver and Canada Nickel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Klondike Silver and Canada Nickel
The main advantage of trading using opposite Klondike Silver and Canada Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klondike Silver position performs unexpectedly, Canada 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 Canada Nickel will offset losses from the drop in Canada Nickel's long position.Klondike Silver vs. Wildsky Resources | Klondike Silver vs. Q Gold Resources | Klondike Silver vs. Plato Gold Corp | Klondike Silver vs. MAS Gold Corp |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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