Correlation Between Nicola Mining and Ballard Power
Can any of the company-specific risk be diversified away by investing in both Nicola Mining and Ballard Power 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 Nicola Mining and Ballard Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nicola Mining and Ballard Power Systems, you can compare the effects of market volatilities on Nicola Mining and Ballard Power 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 Nicola Mining with a short position of Ballard Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nicola Mining and Ballard Power.
Diversification Opportunities for Nicola Mining and Ballard Power
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nicola and Ballard is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Nicola Mining and Ballard Power Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballard Power Systems and Nicola Mining 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 Nicola Mining are associated (or correlated) with Ballard Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballard Power Systems has no effect on the direction of Nicola Mining i.e., Nicola Mining and Ballard Power go up and down completely randomly.
Pair Corralation between Nicola Mining and Ballard Power
Assuming the 90 days horizon Nicola Mining is expected to generate 2.09 times more return on investment than Ballard Power. However, Nicola Mining is 2.09 times more volatile than Ballard Power Systems. It trades about 0.03 of its potential returns per unit of risk. Ballard Power Systems is currently generating about -0.05 per unit of risk. If you would invest 34.00 in Nicola Mining on September 12, 2024 and sell it today you would lose (6.00) from holding Nicola Mining or give up 17.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nicola Mining vs. Ballard Power Systems
Performance |
| Timeline |
| Nicola Mining |
| Ballard Power Systems |
Nicola Mining and Ballard Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nicola Mining and Ballard Power
The main advantage of trading using opposite Nicola Mining and Ballard Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nicola Mining position performs unexpectedly, Ballard Power 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 Ballard Power will offset losses from the drop in Ballard Power's long position.| Nicola Mining vs. Kingsmen Resources | Nicola Mining vs. Gunpoint Exploration | Nicola Mining vs. Themac Resources Group | Nicola Mining vs. Magna Terra Minerals |
| Ballard Power vs. Nicola Mining | Ballard Power vs. Atrium Mortgage Investment | Ballard Power vs. Faction Investment Group | Ballard Power vs. Arbor Metals 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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