Correlation Between Nicola Mining and Winpak
Can any of the company-specific risk be diversified away by investing in both Nicola Mining and Winpak 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 Winpak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nicola Mining and Winpak, you can compare the effects of market volatilities on Nicola Mining and Winpak 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 Winpak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nicola Mining and Winpak.
Diversification Opportunities for Nicola Mining and Winpak
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nicola and Winpak is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Nicola Mining and Winpak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winpak 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 Winpak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winpak has no effect on the direction of Nicola Mining i.e., Nicola Mining and Winpak go up and down completely randomly.
Pair Corralation between Nicola Mining and Winpak
Assuming the 90 days horizon Nicola Mining is expected to generate 6.06 times more return on investment than Winpak. However, Nicola Mining is 6.06 times more volatile than Winpak. It trades about 0.1 of its potential returns per unit of risk. Winpak is currently generating about -0.32 per unit of risk. If you would invest 28.00 in Nicola Mining on November 6, 2024 and sell it today you would earn a total of 2.00 from holding Nicola Mining or generate 7.14% 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. Winpak
Performance |
| Timeline |
| Nicola Mining |
| Winpak |
Nicola Mining and Winpak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nicola Mining and Winpak
The main advantage of trading using opposite Nicola Mining and Winpak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nicola Mining position performs unexpectedly, Winpak 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 Winpak will offset losses from the drop in Winpak's long position.| Nicola Mining vs. Kingsmen Resources | Nicola Mining vs. Gunpoint Exploration | Nicola Mining vs. Magna Terra Minerals | Nicola Mining vs. Black Mammoth Metals |
| Winpak vs. AGF Management Limited | Winpak vs. Dream Office Real | Winpak vs. Slate Grocery REIT | Winpak vs. Highwood Asset Management |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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