Correlation Between Nicola Mining and Highwood Asset
Can any of the company-specific risk be diversified away by investing in both Nicola Mining and Highwood Asset 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 Highwood Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nicola Mining and Highwood Asset Management, you can compare the effects of market volatilities on Nicola Mining and Highwood Asset 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 Highwood Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nicola Mining and Highwood Asset.
Diversification Opportunities for Nicola Mining and Highwood Asset
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nicola and Highwood is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Nicola Mining and Highwood Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highwood Asset Management 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 Highwood Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highwood Asset Management has no effect on the direction of Nicola Mining i.e., Nicola Mining and Highwood Asset go up and down completely randomly.
Pair Corralation between Nicola Mining and Highwood Asset
Assuming the 90 days horizon Nicola Mining is expected to generate 2.49 times more return on investment than Highwood Asset. However, Nicola Mining is 2.49 times more volatile than Highwood Asset Management. It trades about 0.06 of its potential returns per unit of risk. Highwood Asset Management is currently generating about -0.16 per unit of risk. If you would invest 27.00 in Nicola Mining on September 24, 2024 and sell it today you would earn a total of 1.00 from holding Nicola Mining or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nicola Mining vs. Highwood Asset Management
Performance |
| Timeline |
| Nicola Mining |
| Highwood Asset Management |
Nicola Mining and Highwood Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nicola Mining and Highwood Asset
The main advantage of trading using opposite Nicola Mining and Highwood Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nicola Mining position performs unexpectedly, Highwood Asset 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 Highwood Asset will offset losses from the drop in Highwood Asset'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 |
| Highwood Asset vs. US Financial 15 | Highwood Asset vs. Precision Drilling | Highwood Asset vs. Nicola Mining | Highwood Asset vs. Bird Construction |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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