Correlation Between WELL Health and Nicola Mining

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

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

Diversification Opportunities for WELL Health and Nicola Mining

-0.54

Correlation Coefficient

WELL Health  Nicola Mining

Excellent diversification

The 3 months correlation between WELL and Nicola is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding WELL Health Technologies and Nicola Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicola Mining and WELL Health 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 WELL Health Technologies 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 WELL Health i.e., WELL Health and Nicola Mining go up and down completely randomly.

Pair Corralation between WELL Health and Nicola Mining

Assuming the 90 days trading horizon WELL Health Technologies is expected to generate 0.57 times more return on investment than Nicola Mining. However, WELL Health Technologies is 1.76 times less risky than Nicola Mining. It trades about 0.29 of its potential returns per unit of risk. Nicola Mining is currently generating about -0.03 per unit of risk. If you would invest  438.00  in WELL Health Technologies on September 24, 2024 and sell it today you would earn a total of  272.00  from holding WELL Health Technologies or generate 62.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

WELL Health Technologies  vs.  Nicola Mining

WELL Health Technologies

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in WELL Health Technologies are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, WELL Health displayed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with WELL Health and Nicola Mining

The main advantage of trading using opposite WELL Health and Nicola Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WELL Health 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.

The idea behind WELL Health Technologies and Nicola Mining 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.