Correlation Between Silver Range and Nicola Mining

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

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

Diversification Opportunities for Silver Range and Nicola Mining

0.19

Correlation Coefficient

Silver Range  Nicola Mining

Average diversification

The 3 months correlation between Silver and Nicola is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Silver Range Resources and Nicola Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicola Mining and Silver Range 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 Silver Range Resources 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 Silver Range i.e., Silver Range and Nicola Mining go up and down completely randomly.

Pair Corralation between Silver Range and Nicola Mining

Assuming the 90 days horizon Silver Range is expected to generate 1.21 times less return on investment than Nicola Mining. In addition to that, Silver Range is 1.15 times more volatile than Nicola Mining. It trades about 0.03 of its total potential returns per unit of risk. Nicola Mining is currently generating about 0.04 per unit of volatility. If you would invest  26.00  in Nicola Mining on October 13, 2024 and sell it today you would earn a total of  6.00  from holding Nicola Mining or generate 23.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Silver Range Resources  vs.  Nicola Mining

Silver Range Resources

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Silver Range Resources are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Silver Range showed solid returns over the last few months and may actually be approaching a breakup point.

Nicola Mining

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nicola Mining are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Nicola Mining may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Silver Range and Nicola Mining

The main advantage of trading using opposite Silver Range and Nicola Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silver Range 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 Silver Range Resources 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.