Correlation Between Nicola Mining and Storage Vault

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

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

Diversification Opportunities for Nicola Mining and Storage Vault

0.8

Correlation Coefficient

Nicola Mining  Storage Vault

Very poor diversification

The 3 months correlation between Nicola and Storage is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Nicola Mining and Storage Vault Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Storage Vault Canada 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 Storage Vault. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Storage Vault Canada has no effect on the direction of Nicola Mining i.e., Nicola Mining and Storage Vault go up and down completely randomly.

Pair Corralation between Nicola Mining and Storage Vault

Assuming the 90 days horizon Nicola Mining is expected to generate 2.45 times more return on investment than Storage Vault. However, Nicola Mining is 2.45 times more volatile than Storage Vault Canada. It trades about -0.03 of its potential returns per unit of risk. Storage Vault Canada is currently generating about -0.2 per unit of risk. If you would invest  33.00  in Nicola Mining on September 21, 2024 and sell it today you would lose (5.00) from holding Nicola Mining or give up 15.15% of portfolio value over 90 days.

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

Nicola Mining  vs.  Storage Vault Canada

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.

Storage Vault Canada

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Storage Vault Canada has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Nicola Mining and Storage Vault

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

The idea behind Nicola Mining and Storage Vault Canada 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.