Correlation Between Solution Financial and Nicola Mining
Can any of the company-specific risk be diversified away by investing in both Solution Financial and Nicola Mining 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 Solution Financial and Nicola Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solution Financial and Nicola Mining, you can compare the effects of market volatilities on Solution Financial and Nicola Mining 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 Solution Financial with a short position of Nicola Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Financial and Nicola Mining.
Diversification Opportunities for Solution Financial and Nicola Mining
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Solution and Nicola is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Solution Financial and Nicola Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicola Mining and Solution Financial 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 Solution Financial are associated (or correlated) with Nicola Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nicola Mining has no effect on the direction of Solution Financial i.e., Solution Financial and Nicola Mining go up and down completely randomly.
Pair Corralation between Solution Financial and Nicola Mining
Assuming the 90 days trading horizon Solution Financial is expected to generate 0.54 times more return on investment than Nicola Mining. However, Solution Financial is 1.84 times less risky than Nicola Mining. It trades about 0.01 of its potential returns per unit of risk. Nicola Mining is currently generating about -0.05 per unit of risk. If you would invest 28.00 in Solution Financial on October 17, 2024 and sell it today you would earn a total of 0.00 from holding Solution Financial or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solution Financial vs. Nicola Mining
Performance |
| Timeline |
| Solution Financial |
| Nicola Mining |
Solution Financial and Nicola Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Financial and Nicola Mining
The main advantage of trading using opposite Solution Financial and Nicola Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Financial position performs unexpectedly, Nicola Mining 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 Nicola Mining will offset losses from the drop in Nicola Mining's long position.| Solution Financial vs. Highwood Asset Management | Solution Financial vs. TUT Fitness Group | Solution Financial vs. Labrador Iron Ore | Solution Financial vs. CVS HEALTH CDR |
| Nicola Mining vs. Kingsmen Resources | Nicola Mining vs. Gunpoint Exploration | Nicola Mining vs. Themac Resources Group | Nicola Mining vs. Magna Terra Minerals |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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