Correlation Between Mammoth Resources and Nicola Mining

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Can any of the company-specific risk be diversified away by investing in both Mammoth Resources 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 Mammoth Resources and Nicola Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mammoth Resources Corp and Nicola Mining, you can compare the effects of market volatilities on Mammoth Resources 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 Mammoth Resources with a short position of Nicola Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mammoth Resources and Nicola Mining.

Diversification Opportunities for Mammoth Resources and Nicola Mining

-0.5
  Correlation Coefficient

Very good diversification

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

Pair Corralation between Mammoth Resources and Nicola Mining

Assuming the 90 days horizon Mammoth Resources Corp is expected to generate 3.04 times more return on investment than Nicola Mining. However, Mammoth Resources is 3.04 times more volatile than Nicola Mining. It trades about 0.08 of its potential returns per unit of risk. Nicola Mining is currently generating about 0.03 per unit of risk. If you would invest  1.00  in Mammoth Resources Corp on September 14, 2024 and sell it today you would earn a total of  1.00  from holding Mammoth Resources Corp or generate 100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy99.63%
ValuesDaily Returns

Mammoth Resources Corp  vs.  Nicola Mining

 Performance 
       Timeline  
Mammoth Resources Corp 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Mammoth Resources Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Mammoth Resources showed solid returns over the last few months and may actually be approaching a breakup point.
Nicola Mining 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Nicola Mining are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Nicola Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Mammoth Resources and Nicola Mining Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mammoth Resources and Nicola Mining

The main advantage of trading using opposite Mammoth Resources and Nicola Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mammoth Resources 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.
The idea behind Mammoth Resources Corp and Nicola Mining 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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