Correlation Between Nicola Mining and Quipt Home

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

By analyzing existing cross correlation between Nicola Mining and Quipt Home Medical, you can compare the effects of market volatilities on Nicola Mining and Quipt Home 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 Quipt Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nicola Mining and Quipt Home.

Diversification Opportunities for Nicola Mining and Quipt Home

0.17

Correlation Coefficient

Nicola Mining  Quipt Home

Average diversification

The 3 months correlation between Nicola and Quipt is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Nicola Mining and Quipt Home Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quipt Home Medical 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 Quipt Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quipt Home Medical has no effect on the direction of Nicola Mining i.e., Nicola Mining and Quipt Home go up and down completely randomly.

Pair Corralation between Nicola Mining and Quipt Home

Assuming the 90 days horizon Nicola Mining is expected to under-perform the Quipt Home. In addition to that, Nicola Mining is 1.11 times more volatile than Quipt Home Medical. It trades about -0.01 of its total potential returns per unit of risk. Quipt Home Medical is currently generating about 0.04 per unit of volatility. If you would invest  401.00  in Quipt Home Medical on October 7, 2024 and sell it today you would earn a total of  36.00  from holding Quipt Home Medical or generate 8.98% return on investment over 90 days.

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

Nicola Mining  vs.  Quipt Home Medical

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 abnormal 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.

Quipt Home Medical

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Quipt Home Medical are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Quipt Home displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nicola Mining and Quipt Home

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

The idea behind Nicola Mining and Quipt Home Medical 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..