Correlation Between Nicola Mining and American Hotel
Can any of the company-specific risk be diversified away by investing in both Nicola Mining and American Hotel 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 American Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nicola Mining and American Hotel Income, you can compare the effects of market volatilities on Nicola Mining and American Hotel 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 American Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nicola Mining and American Hotel.
Diversification Opportunities for Nicola Mining and American Hotel
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nicola and American is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Nicola Mining and American Hotel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Hotel Income 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 American Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Hotel Income has no effect on the direction of Nicola Mining i.e., Nicola Mining and American Hotel go up and down completely randomly.
Pair Corralation between Nicola Mining and American Hotel
Assuming the 90 days horizon Nicola Mining is expected to generate 1.33 times more return on investment than American Hotel. However, Nicola Mining is 1.33 times more volatile than American Hotel Income. It trades about 0.15 of its potential returns per unit of risk. American Hotel Income is currently generating about 0.17 per unit of risk. If you would invest 28.00 in Nicola Mining on November 9, 2024 and sell it today you would earn a total of 4.00 from holding Nicola Mining or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nicola Mining vs. American Hotel Income
Performance |
| Timeline |
| Nicola Mining |
| American Hotel Income |
Nicola Mining and American Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nicola Mining and American Hotel
The main advantage of trading using opposite Nicola Mining and American Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nicola Mining position performs unexpectedly, American Hotel 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 American Hotel will offset losses from the drop in American Hotel'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 |
| American Hotel vs. Melcor Developments | American Hotel vs. Morguard | American Hotel vs. Madison Pacific Properties | American Hotel vs. Mainstreet Equity 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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