Correlation Between Nicola Mining and Waseco Resources
Can any of the company-specific risk be diversified away by investing in both Nicola Mining and Waseco Resources 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 Waseco Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nicola Mining and Waseco Resources, you can compare the effects of market volatilities on Nicola Mining and Waseco Resources 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 Waseco Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nicola Mining and Waseco Resources.
Diversification Opportunities for Nicola Mining and Waseco Resources
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nicola and Waseco is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Nicola Mining and Waseco Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waseco Resources 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 Waseco Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waseco Resources has no effect on the direction of Nicola Mining i.e., Nicola Mining and Waseco Resources go up and down completely randomly.
Pair Corralation between Nicola Mining and Waseco Resources
Assuming the 90 days horizon Nicola Mining is expected to generate 0.2 times more return on investment than Waseco Resources. However, Nicola Mining is 5.01 times less risky than Waseco Resources. It trades about -0.19 of its potential returns per unit of risk. Waseco Resources is currently generating about -0.05 per unit of risk. If you would invest 31.00 in Nicola Mining on September 4, 2024 and sell it today you would lose (4.00) from holding Nicola Mining or give up 12.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nicola Mining vs. Waseco Resources
Performance |
| Timeline |
| Nicola Mining |
| Waseco Resources |
Nicola Mining and Waseco Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nicola Mining and Waseco Resources
The main advantage of trading using opposite Nicola Mining and Waseco Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nicola Mining position performs unexpectedly, Waseco Resources 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 Waseco Resources will offset losses from the drop in Waseco Resources' 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 |
| Waseco Resources vs. Millennium Silver Corp | Waseco Resources vs. Nicola Mining | Waseco Resources vs. Globex Mining Enterprises | Waseco Resources vs. Capstone Mining 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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