Correlation Between Québec Nickel and Progressive Planet

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

By analyzing existing cross correlation between Qubec Nickel Corp and Progressive Planet Solutions, you can compare the effects of market volatilities on Québec Nickel and Progressive Planet 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 Québec Nickel with a short position of Progressive Planet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Québec Nickel and Progressive Planet.

Diversification Opportunities for Québec Nickel and Progressive Planet

-0.25

Correlation Coefficient

Québec Nickel  Progressive Planet

Very good diversification

The 3 months correlation between Québec and Progressive is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Qubec Nickel Corp and Progressive Planet Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progressive Planet and Québec 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 Qubec Nickel Corp are associated (or correlated) with Progressive Planet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progressive Planet has no effect on the direction of Québec Nickel i.e., Québec Nickel and Progressive Planet go up and down completely randomly.

Pair Corralation between Québec Nickel and Progressive Planet

Assuming the 90 days horizon Qubec Nickel Corp is expected to under-perform the Progressive Planet. In addition to that, Québec Nickel is 2.02 times more volatile than Progressive Planet Solutions. It trades about -0.01 of its total potential returns per unit of risk. Progressive Planet Solutions is currently generating about 0.17 per unit of volatility. If you would invest  7.30  in Progressive Planet Solutions on September 3, 2024 and sell it today you would earn a total of  5.70  from holding Progressive Planet Solutions or generate 78.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Qubec Nickel Corp  vs.  Progressive Planet Solutions

Qubec Nickel Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qubec Nickel Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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.

Progressive Planet

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Progressive Planet Solutions are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Progressive Planet reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Québec Nickel and Progressive Planet

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

The idea behind Qubec Nickel Corp and Progressive Planet Solutions 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.