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

0.51

Correlation Coefficient

Mill City  NIP Group

Very weak diversification

The 3 months correlation between Mill and NIP is 0.51. 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 0.69 times more return on investment than NIP Group. However, Mill City Ventures is 1.45 times less risky than NIP Group. It trades about 0.02 of its potential returns per unit of risk. NIP Group American is currently generating about -0.11 per unit of risk. If you would invest  197.00  in Mill City Ventures on December 25, 2024 and sell it today you would lose (16.00) from holding Mill City Ventures or give up 8.12% of portfolio value over 90 days.

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

Mill City Ventures  vs.  NIP Group American

Mill City Ventures

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mill City Ventures are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Mill City may actually be approaching a critical reversion point that can send shares even higher in April 2025.

NIP Group American

Risk-Adjusted Performance

Very Weak

Over the last 90 days NIP Group American has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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.

The idea behind Mill City Ventures and NIP Group American 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.