Correlation Between Nicola Mining and Thinkific Labs

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

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

Diversification Opportunities for Nicola Mining and Thinkific Labs

-0.39

Correlation Coefficient

Nicola Mining  Thinkific Labs

Very good diversification

The 3 months correlation between Nicola and Thinkific is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Nicola Mining and Thinkific Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thinkific Labs 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 Thinkific Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thinkific Labs has no effect on the direction of Nicola Mining i.e., Nicola Mining and Thinkific Labs go up and down completely randomly.

Pair Corralation between Nicola Mining and Thinkific Labs

Assuming the 90 days horizon Nicola Mining is expected to generate 1.58 times more return on investment than Thinkific Labs. However, Nicola Mining is 1.58 times more volatile than Thinkific Labs. It trades about 0.02 of its potential returns per unit of risk. Thinkific Labs is currently generating about 0.0 per unit of risk. If you would invest  28.00  in Nicola Mining on September 15, 2024 and sell it today you would earn a total of  0.00  from holding Nicola Mining or generate 0.0% 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.  Thinkific Labs

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 fairly stable basic indicators, Nicola Mining is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Thinkific Labs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thinkific Labs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Thinkific Labs is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Nicola Mining and Thinkific Labs

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

The idea behind Nicola Mining and Thinkific Labs 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.