Correlation Between NioCorp Developments and United States

Can any of the company-specific risk be diversified away by investing in both NioCorp Developments and United States 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 NioCorp Developments and United States into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NioCorp Developments Ltd and United States Antimony, you can compare the effects of market volatilities on NioCorp Developments and United States 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 NioCorp Developments with a short position of United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of NioCorp Developments and United States.

Diversification Opportunities for NioCorp Developments and United States

0.07

Correlation Coefficient

NioCorp Developments  United States

Significant diversification

The 3 months correlation between NioCorp and United is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding NioCorp Developments Ltd and United States Antimony in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Antimony and NioCorp Developments 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 NioCorp Developments Ltd are associated (or correlated) with United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Antimony has no effect on the direction of NioCorp Developments i.e., NioCorp Developments and United States go up and down completely randomly.

Pair Corralation between NioCorp Developments and United States

Allowing for the 90-day total investment horizon NioCorp Developments Ltd is expected to under-perform the United States. But the stock apears to be less risky and, when comparing its historical volatility, NioCorp Developments Ltd is 1.46 times less risky than United States. The stock trades about 0.0 of its potential returns per unit of risk. The United States Antimony is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  73.00  in United States Antimony on September 5, 2024 and sell it today you would earn a total of  34.00  from holding United States Antimony or generate 46.58% return on investment over 90 days.

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

NioCorp Developments Ltd  vs.  United States Antimony

NioCorp Developments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NioCorp Developments Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, NioCorp Developments is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

United States Antimony

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in United States Antimony are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, United States showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NioCorp Developments and United States

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

The idea behind NioCorp Developments Ltd and United States Antimony 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 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.