Correlation Between Mill City and Niagara Mohawk
Can any of the company-specific risk be diversified away by investing in both Mill City and Niagara Mohawk 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 Mill City and Niagara Mohawk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mill City Ventures and Niagara Mohawk Power, you can compare the effects of market volatilities on Mill City and Niagara Mohawk 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 Mill City with a short position of Niagara Mohawk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mill City and Niagara Mohawk.
Diversification Opportunities for Mill City and Niagara Mohawk
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mill and Niagara is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Mill City Ventures and Niagara Mohawk Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niagara Mohawk Power and Mill City 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 Mill City Ventures are associated (or correlated) with Niagara Mohawk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niagara Mohawk Power has no effect on the direction of Mill City i.e., Mill City and Niagara Mohawk go up and down completely randomly.
Pair Corralation between Mill City and Niagara Mohawk
Given the investment horizon of 90 days Mill City Ventures is expected to under-perform the Niagara Mohawk. In addition to that, Mill City is 13.53 times more volatile than Niagara Mohawk Power. It trades about -0.07 of its total potential returns per unit of risk. Niagara Mohawk Power is currently generating about 0.0 per unit of volatility. If you would invest 6,200 in Niagara Mohawk Power on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Niagara Mohawk Power or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Mill City Ventures vs. Niagara Mohawk Power
Performance |
| Timeline |
| Mill City Ventures |
| Niagara Mohawk Power |
Mill City and Niagara Mohawk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mill City and Niagara Mohawk
The main advantage of trading using opposite Mill City and Niagara Mohawk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mill City position performs unexpectedly, Niagara Mohawk 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 Niagara Mohawk will offset losses from the drop in Niagara Mohawk's long position.| Mill City vs. Consumer Portfolio Services | Mill City vs. Atlanticus Holdings Corp | Mill City vs. Nelnet Inc | Mill City vs. Senmiao Technology |
| Niagara Mohawk vs. Scholastic | Niagara Mohawk vs. CVR Partners LP | Niagara Mohawk vs. NL Industries | Niagara Mohawk vs. Avient Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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