Correlation Between Nicola Mining and Sabio Holdings
Can any of the company-specific risk be diversified away by investing in both Nicola Mining and Sabio Holdings 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 Sabio Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nicola Mining and Sabio Holdings, you can compare the effects of market volatilities on Nicola Mining and Sabio Holdings 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 Sabio Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nicola Mining and Sabio Holdings.
Diversification Opportunities for Nicola Mining and Sabio Holdings
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nicola and Sabio is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Nicola Mining and Sabio Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabio Holdings 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 Sabio Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabio Holdings has no effect on the direction of Nicola Mining i.e., Nicola Mining and Sabio Holdings go up and down completely randomly.
Pair Corralation between Nicola Mining and Sabio Holdings
Assuming the 90 days horizon Nicola Mining is expected to generate 0.79 times more return on investment than Sabio Holdings. However, Nicola Mining is 1.27 times less risky than Sabio Holdings. It trades about -0.05 of its potential returns per unit of risk. Sabio Holdings is currently generating about -0.06 per unit of risk. If you would invest 32.00 in Nicola Mining on September 13, 2024 and sell it today you would lose (4.00) from holding Nicola Mining or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nicola Mining vs. Sabio Holdings
Performance |
| Timeline |
| Nicola Mining |
| Sabio Holdings |
Nicola Mining and Sabio Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nicola Mining and Sabio Holdings
The main advantage of trading using opposite Nicola Mining and Sabio Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nicola Mining position performs unexpectedly, Sabio Holdings 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 Sabio Holdings will offset losses from the drop in Sabio Holdings' long position.| Nicola Mining vs. Foraco International SA | Nicola Mining vs. Geodrill Limited | Nicola Mining vs. Major Drilling Group | Nicola Mining vs. Bri Chem Corp |
| Sabio Holdings vs. Forsys Metals Corp | Sabio Holdings vs. Sparx Technology | Sabio Holdings vs. Bird Construction | Sabio Holdings vs. North American 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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