Correlation Between Minerals Technologies and Nocopi Technologies

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

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

Diversification Opportunities for Minerals Technologies and Nocopi Technologies

-0.13

Correlation Coefficient

Minerals Technologies  Nocopi Technologies

Good diversification

The 3 months correlation between Minerals and Nocopi is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Minerals Technologies and Nocopi Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nocopi Technologies and Minerals Technologies 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 Minerals Technologies are associated (or correlated) with Nocopi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nocopi Technologies has no effect on the direction of Minerals Technologies i.e., Minerals Technologies and Nocopi Technologies go up and down completely randomly.

Pair Corralation between Minerals Technologies and Nocopi Technologies

Considering the 90-day investment horizon Minerals Technologies is expected to generate 0.64 times more return on investment than Nocopi Technologies. However, Minerals Technologies is 1.55 times less risky than Nocopi Technologies. It trades about 0.02 of its potential returns per unit of risk. Nocopi Technologies is currently generating about -0.08 per unit of risk. If you would invest  7,160  in Minerals Technologies on October 12, 2024 and sell it today you would earn a total of  167.00  from holding Minerals Technologies or generate 2.33% return on investment over 90 days.

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

Minerals Technologies  vs.  Nocopi Technologies

Minerals Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Minerals Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Minerals Technologies is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Nocopi Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nocopi Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Minerals Technologies and Nocopi Technologies

The main advantage of trading using opposite Minerals Technologies and Nocopi Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minerals Technologies position performs unexpectedly, Nocopi Technologies 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 Nocopi Technologies will offset losses from the drop in Nocopi Technologies' long position.

The idea behind Minerals Technologies and Nocopi Technologies 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.