Correlation Between Nicola Mining and Broadcom

Can any of the company-specific risk be diversified away by investing in both Nicola Mining and Broadcom 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 Broadcom into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nicola Mining and Broadcom, you can compare the effects of market volatilities on Nicola Mining and Broadcom 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 Broadcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nicola Mining and Broadcom.

Diversification Opportunities for Nicola Mining and Broadcom

0.01

Correlation Coefficient

Nicola Mining  Broadcom

Significant diversification

The 3 months correlation between Nicola and Broadcom is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Nicola Mining and Broadcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadcom 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 Broadcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadcom has no effect on the direction of Nicola Mining i.e., Nicola Mining and Broadcom go up and down completely randomly.

Pair Corralation between Nicola Mining and Broadcom

Assuming the 90 days horizon Nicola Mining is expected to under-perform the Broadcom. In addition to that, Nicola Mining is 1.13 times more volatile than Broadcom. It trades about 0.0 of its total potential returns per unit of risk. Broadcom is currently generating about 0.09 per unit of volatility. If you would invest  4,119  in Broadcom on October 1, 2024 and sell it today you would earn a total of  1,666  from holding Broadcom or generate 40.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Nicola Mining  vs.  Broadcom

Nicola Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nicola Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Broadcom

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Broadcom are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Broadcom exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nicola Mining and Broadcom

The main advantage of trading using opposite Nicola Mining and Broadcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nicola Mining position performs unexpectedly, Broadcom 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 Broadcom will offset losses from the drop in Broadcom's long position.

The idea behind Nicola Mining and Broadcom 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.