Correlation Between Flying Nickel and Monitor Ventures
Can any of the company-specific risk be diversified away by investing in both Flying Nickel and Monitor Ventures 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 Flying Nickel and Monitor Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flying Nickel Mining and Monitor Ventures, you can compare the effects of market volatilities on Flying Nickel and Monitor Ventures 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 Flying Nickel with a short position of Monitor Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flying Nickel and Monitor Ventures.
Diversification Opportunities for Flying Nickel and Monitor Ventures
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Flying and Monitor is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Flying Nickel Mining and Monitor Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monitor Ventures and Flying 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 Flying Nickel Mining are associated (or correlated) with Monitor Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monitor Ventures has no effect on the direction of Flying Nickel i.e., Flying Nickel and Monitor Ventures go up and down completely randomly.
Pair Corralation between Flying Nickel and Monitor Ventures
Assuming the 90 days horizon Flying Nickel Mining is expected to generate 7.87 times more return on investment than Monitor Ventures. However, Flying Nickel is 7.87 times more volatile than Monitor Ventures. It trades about 0.05 of its potential returns per unit of risk. Monitor Ventures is currently generating about 0.0 per unit of risk. If you would invest 6.00 in Flying Nickel Mining on December 11, 2024 and sell it today you would lose (3.34) from holding Flying Nickel Mining or give up 55.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.13% |
| Values | Daily Returns |
Flying Nickel Mining vs. Monitor Ventures
Performance |
| Timeline |
| Flying Nickel Mining |
Risk-Adjusted Performance
Insignificant
Weak | Strong |
| Monitor Ventures |
Flying Nickel and Monitor Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flying Nickel and Monitor Ventures
The main advantage of trading using opposite Flying Nickel and Monitor Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flying Nickel position performs unexpectedly, Monitor Ventures 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 Monitor Ventures will offset losses from the drop in Monitor Ventures' long position.| Flying Nickel vs. Euro Manganese | ||
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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