Correlation Between Mill City and NIP Group
Can any of the company-specific risk be diversified away by investing in both Mill City and NIP Group 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 Mill City and NIP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mill City Ventures and NIP Group American, you can compare the effects of market volatilities on Mill City and NIP Group 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 Mill City with a short position of NIP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mill City and NIP Group.
Diversification Opportunities for Mill City and NIP Group
Significant diversification
The 3 months correlation between Mill and NIP is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Mill City Ventures and NIP Group American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIP Group American and Mill City 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 Mill City Ventures are associated (or correlated) with NIP Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIP Group American has no effect on the direction of Mill City i.e., Mill City and NIP Group go up and down completely randomly.
Pair Corralation between Mill City and NIP Group
Given the investment horizon of 90 days Mill City Ventures is expected to generate 0.62 times more return on investment than NIP Group. However, Mill City Ventures is 1.62 times less risky than NIP Group. It trades about -0.33 of its potential returns per unit of risk. NIP Group American is currently generating about -0.24 per unit of risk. If you would invest 301.00 in Mill City Ventures on December 4, 2024 and sell it today you would lose (113.00) from holding Mill City Ventures or give up 37.54% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Mill City Ventures vs. NIP Group American
Performance |
Timeline |
Mill City Ventures |
NIP Group American |
Mill City and NIP Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mill City and NIP Group
The main advantage of trading using opposite Mill City and NIP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mill City position performs unexpectedly, NIP Group 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 NIP Group will offset losses from the drop in NIP Group's long position.Mill City vs. Consumer Portfolio Services | Mill City vs. Atlanticus Holdings Corp | Mill City vs. Nelnet Inc | Mill City vs. Senmiao Technology |
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Check out your portfolio center.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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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