Correlation Between Strategic Resources and SPC Nickel

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

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

Diversification Opportunities for Strategic Resources and SPC Nickel

0.0

Correlation Coefficient

Strategic Resources  SPC Nickel

Pay attention - limited upside

The 3 months correlation between Strategic and SPC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Resources and SPC Nickel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPC Nickel Corp and Strategic 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 Strategic Resources are associated (or correlated) with SPC Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPC Nickel Corp has no effect on the direction of Strategic Resources i.e., Strategic Resources and SPC Nickel go up and down completely randomly.

Pair Corralation between Strategic Resources and SPC Nickel

Assuming the 90 days horizon Strategic Resources is expected to under-perform the SPC Nickel. But the pink sheet apears to be less risky and, when comparing its historical volatility, Strategic Resources is 3.85 times less risky than SPC Nickel. The pink sheet trades about -0.06 of its potential returns per unit of risk. The SPC Nickel Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  4.00  in SPC Nickel Corp on September 13, 2024 and sell it today you would lose (2.73) from holding SPC Nickel Corp or give up 68.25% of portfolio value over 90 days.

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

Strategic Resources  vs.  SPC Nickel Corp

Strategic Resources

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Strategic Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Strategic Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

SPC Nickel Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPC Nickel 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.

Pair Trading with Strategic Resources and SPC Nickel

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

The idea behind Strategic Resources and SPC Nickel Corp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.