Correlation Between Manila Mining and Nickel Asia

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Can any of the company-specific risk be diversified away by investing in both Manila Mining and Nickel Asia 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 Manila Mining and Nickel Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manila Mining Corp and Nickel Asia Corp, you can compare the effects of market volatilities on Manila Mining and Nickel Asia 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 Manila Mining with a short position of Nickel Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manila Mining and Nickel Asia.

Diversification Opportunities for Manila Mining and Nickel Asia

ManilaNickelDiversified AwayManilaNickelDiversified Away100%
0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between Manila and Nickel is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Manila Mining Corp and Nickel Asia Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nickel Asia Corp and Manila 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 Manila Mining Corp are associated (or correlated) with Nickel Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nickel Asia Corp has no effect on the direction of Manila Mining i.e., Manila Mining and Nickel Asia go up and down completely randomly.

Pair Corralation between Manila Mining and Nickel Asia

Assuming the 90 days trading horizon Manila Mining Corp is expected to under-perform the Nickel Asia. In addition to that, Manila Mining is 1.53 times more volatile than Nickel Asia Corp. It trades about -0.15 of its total potential returns per unit of risk. Nickel Asia Corp is currently generating about -0.1 per unit of volatility. If you would invest  367.00  in Nickel Asia Corp on October 16, 2024 and sell it today you would lose (51.00) from holding Nickel Asia Corp or give up 13.9% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy48.28%
ValuesDaily Returns

Manila Mining Corp  vs.  Nickel Asia Corp

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -25-20-15-10-5
JavaScript chart by amCharts 3.21.15MAB NIKL
       Timeline  
Manila Mining Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Manila Mining Corp 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
JavaScript chart by amCharts 3.21.15SepOctNovDecJanOctNovDecJan0.00280.0030.00320.00340.00360.00380.0040.0042
Nickel Asia Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Nickel Asia Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan33.23.43.63.8

Manila Mining and Nickel Asia Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.1-4.57-3.04-1.51-0.0241.422.864.35.74 0.030.040.050.060.07
JavaScript chart by amCharts 3.21.15MAB NIKL
       Returns  

Pair Trading with Manila Mining and Nickel Asia

The main advantage of trading using opposite Manila Mining and Nickel Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manila Mining position performs unexpectedly, Nickel Asia 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 Nickel Asia will offset losses from the drop in Nickel Asia's long position.
The idea behind Manila Mining Corp and Nickel Asia Corp 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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