Correlation Between Nickel Creek and Canada Nickel

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

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

Diversification Opportunities for Nickel Creek and Canada Nickel

-0.5

Correlation Coefficient

Nickel Creek  Canada Nickel

Very good diversification

The 3 months correlation between Nickel and Canada is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Nickel Creek Platinum and Canada Nickel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Nickel and Nickel Creek 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 Nickel Creek Platinum 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 Nickel Creek i.e., Nickel Creek and Canada Nickel go up and down completely randomly.

Pair Corralation between Nickel Creek and Canada Nickel

Assuming the 90 days horizon Nickel Creek Platinum is expected to generate 4.24 times more return on investment than Canada Nickel. However, Nickel Creek is 4.24 times more volatile than Canada Nickel. It trades about 0.21 of its potential returns per unit of risk. Canada Nickel is currently generating about -0.16 per unit of risk. If you would invest  44.00  in Nickel Creek Platinum on May 7, 2025 and sell it today you would earn a total of  96.00  from holding Nickel Creek Platinum or generate 218.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Nickel Creek Platinum  vs.  Canada Nickel

Nickel Creek Platinum

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nickel Creek Platinum are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Nickel Creek reported solid returns over the last few months and may actually be approaching a breakup point.

Canada Nickel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Canada Nickel 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 forward-looking signals remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Nickel Creek and Canada Nickel

The main advantage of trading using opposite Nickel Creek and Canada Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nickel Creek 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.

The idea behind Nickel Creek Platinum and Canada Nickel 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.