Correlation Between Storage Vault and Nicola Mining

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

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

Diversification Opportunities for Storage Vault and Nicola Mining

0.8

Correlation Coefficient

Storage Vault  Nicola Mining

Very poor diversification

The 3 months correlation between Storage and Nicola is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Storage Vault Canada and Nicola Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicola Mining and Storage Vault 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 Storage Vault Canada 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 Storage Vault i.e., Storage Vault and Nicola Mining go up and down completely randomly.

Pair Corralation between Storage Vault and Nicola Mining

Assuming the 90 days trading horizon Storage Vault Canada is expected to under-perform the Nicola Mining. But the stock apears to be less risky and, when comparing its historical volatility, Storage Vault Canada is 2.45 times less risky than Nicola Mining. The stock trades about -0.2 of its potential returns per unit of risk. The Nicola Mining is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  33.00  in Nicola Mining on September 21, 2024 and sell it today you would lose (5.00) from holding Nicola Mining or give up 15.15% of portfolio value over 90 days.

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

Storage Vault Canada  vs.  Nicola Mining

Storage Vault Canada

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Storage Vault Canada has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

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.

Pair Trading with Storage Vault and Nicola Mining

The main advantage of trading using opposite Storage Vault and Nicola Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Storage Vault 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 Storage Vault Canada 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.