Correlation Between Nicola Mining and HOME DEPOT
Can any of the company-specific risk be diversified away by investing in both Nicola Mining and HOME DEPOT 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 HOME DEPOT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nicola Mining and HOME DEPOT CDR, you can compare the effects of market volatilities on Nicola Mining and HOME DEPOT 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 HOME DEPOT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nicola Mining and HOME DEPOT.
Diversification Opportunities for Nicola Mining and HOME DEPOT
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nicola and HOME is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Nicola Mining and HOME DEPOT CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOME DEPOT CDR 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 HOME DEPOT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOME DEPOT CDR has no effect on the direction of Nicola Mining i.e., Nicola Mining and HOME DEPOT go up and down completely randomly.
Pair Corralation between Nicola Mining and HOME DEPOT
Assuming the 90 days horizon Nicola Mining is expected to under-perform the HOME DEPOT. In addition to that, Nicola Mining is 2.05 times more volatile than HOME DEPOT CDR. It trades about -0.19 of its total potential returns per unit of risk. HOME DEPOT CDR is currently generating about 0.25 per unit of volatility. If you would invest 2,542 in HOME DEPOT CDR on August 30, 2024 and sell it today you would earn a total of 213.00 from holding HOME DEPOT CDR or generate 8.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nicola Mining vs. HOME DEPOT CDR
Performance |
| Timeline |
| Nicola Mining |
| HOME DEPOT CDR |
Nicola Mining and HOME DEPOT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nicola Mining and HOME DEPOT
The main advantage of trading using opposite Nicola Mining and HOME DEPOT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nicola Mining position performs unexpectedly, HOME DEPOT 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 HOME DEPOT will offset losses from the drop in HOME DEPOT'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 |
| HOME DEPOT vs. Berkshire Hathaway CDR | HOME DEPOT vs. JPMorgan Chase Co | HOME DEPOT vs. Bank of America | HOME DEPOT vs. Alphabet Inc CDR |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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