Correlation Between Renoworks Software and Nicola Mining

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Can any of the company-specific risk be diversified away by investing in both Renoworks Software 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 Renoworks Software and Nicola Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Renoworks Software and Nicola Mining, you can compare the effects of market volatilities on Renoworks Software 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 Renoworks Software with a short position of Nicola Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renoworks Software and Nicola Mining.

Diversification Opportunities for Renoworks Software and Nicola Mining

RenoworksNicolaDiversified AwayRenoworksNicolaDiversified Away100%
0.17
  Correlation Coefficient

Average diversification

The 3 months correlation between Renoworks and Nicola is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Renoworks Software and Nicola Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicola Mining and Renoworks Software 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 Renoworks Software 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 Renoworks Software i.e., Renoworks Software and Nicola Mining go up and down completely randomly.

Pair Corralation between Renoworks Software and Nicola Mining

Given the investment horizon of 90 days Renoworks Software is expected to generate 1.03 times less return on investment than Nicola Mining. But when comparing it to its historical volatility, Renoworks Software is 1.49 times less risky than Nicola Mining. It trades about 0.05 of its potential returns per unit of risk. Nicola Mining is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  30.00  in Nicola Mining on November 27, 2024 and sell it today you would earn a total of  4.00  from holding Nicola Mining or generate 13.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Renoworks Software  vs.  Nicola Mining

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -1001020
JavaScript chart by amCharts 3.21.15RW NIM
       Timeline  
Renoworks Software 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Renoworks Software are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Renoworks Software is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.270.280.290.30.310.32
Nicola Mining 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Nicola Mining are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Nicola Mining showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.240.260.280.30.320.340.36

Renoworks Software and Nicola Mining Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.75-3.56-2.36-1.17-0.01951.132.313.484.655.82 0.0200.0250.0300.0350.0400.045
JavaScript chart by amCharts 3.21.15RW NIM
       Returns  

Pair Trading with Renoworks Software and Nicola Mining

The main advantage of trading using opposite Renoworks Software and Nicola Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renoworks Software 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 Renoworks Software 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

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