Correlation Between Millbank Mining and Nicola Mining

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

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

Diversification Opportunities for Millbank Mining and Nicola Mining

-0.18

Correlation Coefficient

Millbank Mining  Nicola Mining

Good diversification

The 3 months correlation between Millbank and Nicola is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Millbank Mining Corp and Nicola Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicola Mining and Millbank 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 Millbank Mining Corp 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 Millbank Mining i.e., Millbank Mining and Nicola Mining go up and down completely randomly.

Pair Corralation between Millbank Mining and Nicola Mining

Assuming the 90 days trading horizon Millbank Mining Corp is expected to generate 1.07 times more return on investment than Nicola Mining. However, Millbank Mining is 1.07 times more volatile than Nicola Mining. It trades about 0.1 of its potential returns per unit of risk. Nicola Mining is currently generating about -0.03 per unit of risk. If you would invest  35.00  in Millbank Mining Corp on October 3, 2024 and sell it today you would earn a total of  12.00  from holding Millbank Mining Corp or generate 34.29% return on investment over 90 days.

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

Millbank Mining Corp  vs.  Nicola Mining

Millbank Mining Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Millbank Mining Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal essential indicators, Millbank Mining may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 unfluctuating 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 Millbank Mining and Nicola Mining

The main advantage of trading using opposite Millbank Mining and Nicola Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Millbank Mining 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 Millbank Mining Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.