Correlation Between Nobel Resources and Canada Silver

Can any of the company-specific risk be diversified away by investing in both Nobel Resources and Canada Silver 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 Nobel Resources and Canada Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nobel Resources Corp and Canada Silver Cobalt, you can compare the effects of market volatilities on Nobel Resources and Canada Silver 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 Nobel Resources with a short position of Canada Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nobel Resources and Canada Silver.

Diversification Opportunities for Nobel Resources and Canada Silver

-0.01

Correlation Coefficient

Nobel Resources  Canada Silver

Good diversification

The 3 months correlation between Nobel and Canada is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Nobel Resources Corp and Canada Silver Cobalt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Silver Cobalt and Nobel Resources 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 Nobel Resources Corp are associated (or correlated) with Canada Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canada Silver Cobalt has no effect on the direction of Nobel Resources i.e., Nobel Resources and Canada Silver go up and down completely randomly.

Pair Corralation between Nobel Resources and Canada Silver

Assuming the 90 days horizon Nobel Resources Corp is expected to under-perform the Canada Silver. But the otc stock apears to be less risky and, when comparing its historical volatility, Nobel Resources Corp is 1.24 times less risky than Canada Silver. The otc stock trades about -0.06 of its potential returns per unit of risk. The Canada Silver Cobalt is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Canada Silver Cobalt on September 13, 2024 and sell it today you would lose (3.00) from holding Canada Silver Cobalt or give up 21.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

Nobel Resources Corp  vs.  Canada Silver Cobalt

Nobel Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nobel Resources Corp 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 basic 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.

Canada Silver Cobalt

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Canada Silver Cobalt has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Nobel Resources and Canada Silver

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

The idea behind Nobel Resources Corp and Canada Silver Cobalt 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.