Correlation Between Nicola Mining and Maple Leaf
Can any of the company-specific risk be diversified away by investing in both Nicola Mining and Maple Leaf 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 Maple Leaf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nicola Mining and Maple Leaf Foods, you can compare the effects of market volatilities on Nicola Mining and Maple Leaf 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 Maple Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nicola Mining and Maple Leaf.
Diversification Opportunities for Nicola Mining and Maple Leaf
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nicola and Maple is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Nicola Mining and Maple Leaf Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Leaf Foods 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 Maple Leaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Leaf Foods has no effect on the direction of Nicola Mining i.e., Nicola Mining and Maple Leaf go up and down completely randomly.
Pair Corralation between Nicola Mining and Maple Leaf
Assuming the 90 days horizon Nicola Mining is expected to generate 3.72 times more return on investment than Maple Leaf. However, Nicola Mining is 3.72 times more volatile than Maple Leaf Foods. It trades about 0.04 of its potential returns per unit of risk. Maple Leaf Foods is currently generating about 0.01 per unit of risk. If you would invest 22.00 in Nicola Mining on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Nicola Mining or generate 22.73% 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. Maple Leaf Foods
Performance |
| Timeline |
| Nicola Mining |
| Maple Leaf Foods |
Nicola Mining and Maple Leaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nicola Mining and Maple Leaf
The main advantage of trading using opposite Nicola Mining and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nicola Mining position performs unexpectedly, Maple Leaf 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 Maple Leaf will offset losses from the drop in Maple Leaf's long position.| Nicola Mining vs. First Majestic Silver | Nicola Mining vs. Ivanhoe Energy | Nicola Mining vs. Orezone Gold Corp | Nicola Mining vs. Faraday Copper Corp |
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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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