Correlation Between Forward Water and Nicola Mining
Can any of the company-specific risk be diversified away by investing in both Forward Water and Nicola 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 Forward Water and Nicola Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forward Water Technologies and Nicola Mining, you can compare the effects of market volatilities on Forward Water and Nicola 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 Forward Water with a short position of Nicola Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forward Water and Nicola Mining.
Diversification Opportunities for Forward Water and Nicola Mining
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Forward and Nicola is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Forward Water Technologies and Nicola Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicola Mining and Forward Water 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 Forward Water Technologies are associated (or correlated) with Nicola Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nicola Mining has no effect on the direction of Forward Water i.e., Forward Water and Nicola Mining go up and down completely randomly.
Pair Corralation between Forward Water and Nicola Mining
Assuming the 90 days trading horizon Forward Water Technologies is expected to generate 1.93 times more return on investment than Nicola Mining. However, Forward Water is 1.93 times more volatile than Nicola Mining. It trades about 0.03 of its potential returns per unit of risk. Nicola Mining is currently generating about 0.02 per unit of risk. If you would invest 65.00 in Forward Water Technologies on September 12, 2024 and sell it today you would lose (55.50) from holding Forward Water Technologies or give up 85.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forward Water Technologies vs. Nicola Mining
Performance |
| Timeline |
| Forward Water Techno |
| Nicola Mining |
Forward Water and Nicola Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forward Water and Nicola Mining
The main advantage of trading using opposite Forward Water and Nicola Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forward Water position performs unexpectedly, Nicola 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 Nicola Mining will offset losses from the drop in Nicola Mining's long position.| Forward Water vs. Nicola Mining | Forward Water vs. Caribbean Utilities | Forward Water vs. Arbor Metals Corp | Forward Water vs. Marimaca Copper Corp |
| Nicola Mining vs. Kingsmen Resources | Nicola Mining vs. Gunpoint Exploration | Nicola Mining vs. Themac Resources Group | Nicola Mining vs. Magna Terra Minerals |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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