Correlation Between Nasdaq and Millbank Mining
Can any of the company-specific risk be diversified away by investing in both Nasdaq and Millbank 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 Nasdaq and Millbank Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and Millbank Mining Corp, you can compare the effects of market volatilities on Nasdaq and Millbank 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 Nasdaq with a short position of Millbank Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Millbank Mining.
Diversification Opportunities for Nasdaq and Millbank Mining
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nasdaq and Millbank is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Millbank Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millbank Mining Corp and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Millbank Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millbank Mining Corp has no effect on the direction of Nasdaq i.e., Nasdaq and Millbank Mining go up and down completely randomly.
Pair Corralation between Nasdaq and Millbank Mining
Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.27 times more return on investment than Millbank Mining. However, Nasdaq Inc is 3.67 times less risky than Millbank Mining. It trades about 0.01 of its potential returns per unit of risk. Millbank Mining Corp is currently generating about -0.07 per unit of risk. If you would invest 7,954 in Nasdaq Inc on September 19, 2024 and sell it today you would earn a total of 7.00 from holding Nasdaq Inc or generate 0.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nasdaq Inc vs. Millbank Mining Corp
Performance |
| Timeline |
| Nasdaq Inc |
| Millbank Mining Corp |
Nasdaq and Millbank Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and Millbank Mining
The main advantage of trading using opposite Nasdaq and Millbank Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, Millbank 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 Millbank Mining will offset losses from the drop in Millbank Mining's long position.The idea behind Nasdaq Inc and Millbank Mining 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.| Millbank Mining vs. Foraco International SA | Millbank Mining vs. Geodrill Limited | Millbank Mining vs. Bri Chem 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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