Correlation Between Nordic Asia and Filo Mining

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

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

Diversification Opportunities for Nordic Asia and Filo Mining

-0.04

Correlation Coefficient

Nordic Asia  Filo Mining

Good diversification

The 3 months correlation between Nordic and Filo is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Asia Investment and Filo Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Filo Mining Corp and Nordic Asia 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 Nordic Asia Investment are associated (or correlated) with Filo Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Filo Mining Corp has no effect on the direction of Nordic Asia i.e., Nordic Asia and Filo Mining go up and down completely randomly.

Pair Corralation between Nordic Asia and Filo Mining

Assuming the 90 days trading horizon Nordic Asia Investment is expected to under-perform the Filo Mining. In addition to that, Nordic Asia is 1.61 times more volatile than Filo Mining Corp. It trades about -0.11 of its total potential returns per unit of risk. Filo Mining Corp is currently generating about 0.1 per unit of volatility. If you would invest  24,850  in Filo Mining Corp on September 5, 2024 and sell it today you would earn a total of  500.00  from holding Filo Mining Corp or generate 2.01% return on investment over 90 days.

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

Nordic Asia Investment  vs.  Filo Mining Corp

Nordic Asia Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nordic Asia Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Nordic Asia is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Filo Mining Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Filo Mining Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Filo Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Nordic Asia and Filo Mining

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

The idea behind Nordic Asia Investment and Filo Mining 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.