Correlation Between Nicola Mining and Goeasy

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

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

Diversification Opportunities for Nicola Mining and Goeasy

0.49

Correlation Coefficient

Nicola Mining  Goeasy

Very weak diversification

The 3 months correlation between Nicola and Goeasy is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Nicola Mining and goeasy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on goeasy and Nicola 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 Nicola Mining are associated (or correlated) with Goeasy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of goeasy has no effect on the direction of Nicola Mining i.e., Nicola Mining and Goeasy go up and down completely randomly.

Pair Corralation between Nicola Mining and Goeasy

Assuming the 90 days horizon Nicola Mining is expected to generate 2.32 times less return on investment than Goeasy. In addition to that, Nicola Mining is 4.5 times more volatile than goeasy. It trades about 0.03 of its total potential returns per unit of risk. goeasy is currently generating about 0.27 per unit of volatility. If you would invest  16,271  in goeasy on October 11, 2024 and sell it today you would earn a total of  1,118  from holding goeasy or generate 6.87% return on investment over 90 days.

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

Nicola Mining  vs.  goeasy

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 fairly stable basic indicators, Nicola Mining is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

goeasy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days goeasy 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 healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Nicola Mining and Goeasy

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

The idea behind Nicola Mining and goeasy 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.