Correlation Between Qubec Nickel and Sayona Mining

Can any of the company-specific risk be diversified away by investing in both Qubec Nickel and Sayona Mining 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 Qubec Nickel and Sayona Mining 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 Sayona Mining Limited, you can compare the effects of market volatilities on Qubec Nickel and Sayona Mining 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 Qubec Nickel with a short position of Sayona Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qubec Nickel and Sayona Mining.

Diversification Opportunities for Qubec Nickel and Sayona Mining

-0.01

Correlation Coefficient

Qubec Nickel  Sayona Mining

Good diversification

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

Pair Corralation between Qubec Nickel and Sayona Mining

Assuming the 90 days horizon Qubec Nickel Corp is expected to generate 6.46 times more return on investment than Sayona Mining. However, Qubec Nickel is 6.46 times more volatile than Sayona Mining Limited. It trades about 0.12 of its potential returns per unit of risk. Sayona Mining Limited is currently generating about 0.04 per unit of risk. If you would invest  8.28  in Qubec Nickel Corp on September 12, 2024 and sell it today you would earn a total of  0.01  from holding Qubec Nickel Corp or generate 0.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Qubec Nickel Corp  vs.  Sayona Mining Limited

Qubec Nickel Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Qubec Nickel Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Qubec Nickel reported solid returns over the last few months and may actually be approaching a breakup point.

Sayona Mining Limited

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sayona Mining Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sayona Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Qubec Nickel and Sayona Mining

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

The idea behind Qubec Nickel Corp and Sayona Mining Limited 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.