Correlation Between Nicola Mining and Canso Credit
Can any of the company-specific risk be diversified away by investing in both Nicola Mining and Canso Credit 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 Canso Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nicola Mining and Canso Credit Trust, you can compare the effects of market volatilities on Nicola Mining and Canso Credit 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 Canso Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nicola Mining and Canso Credit.
Diversification Opportunities for Nicola Mining and Canso Credit
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nicola and Canso is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Nicola Mining and Canso Credit Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canso Credit Trust 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 Canso Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canso Credit Trust has no effect on the direction of Nicola Mining i.e., Nicola Mining and Canso Credit go up and down completely randomly.
Pair Corralation between Nicola Mining and Canso Credit
Assuming the 90 days horizon Nicola Mining is expected to under-perform the Canso Credit. In addition to that, Nicola Mining is 8.01 times more volatile than Canso Credit Trust. It trades about -0.19 of its total potential returns per unit of risk. Canso Credit Trust is currently generating about 0.16 per unit of volatility. If you would invest 1,539 in Canso Credit Trust on September 2, 2024 and sell it today you would earn a total of 21.00 from holding Canso Credit Trust or generate 1.36% 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. Canso Credit Trust
Performance |
| Timeline |
| Nicola Mining |
| Canso Credit Trust |
Nicola Mining and Canso Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nicola Mining and Canso Credit
The main advantage of trading using opposite Nicola Mining and Canso Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nicola Mining position performs unexpectedly, Canso Credit 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 Canso Credit will offset losses from the drop in Canso Credit's long position.The idea behind Nicola Mining and Canso Credit Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Canso Credit vs. MINT Income Fund | Canso Credit vs. Canadian High Income | Canso Credit vs. Blue Ribbon Income | Canso Credit vs. Australian REIT Income |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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