Correlation Between Nicola Mining and MIND CTI

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

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

Diversification Opportunities for Nicola Mining and MIND CTI

-0.12

Correlation Coefficient

Nicola Mining  MIND CTI

Good diversification

The 3 months correlation between Nicola and MIND is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Nicola Mining and MIND CTI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIND CTI 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 MIND CTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIND CTI has no effect on the direction of Nicola Mining i.e., Nicola Mining and MIND CTI go up and down completely randomly.

Pair Corralation between Nicola Mining and MIND CTI

Assuming the 90 days horizon Nicola Mining is expected to generate 5.2 times more return on investment than MIND CTI. However, Nicola Mining is 5.2 times more volatile than MIND CTI. It trades about 0.07 of its potential returns per unit of risk. MIND CTI is currently generating about 0.01 per unit of risk. If you would invest  18.00  in Nicola Mining on January 26, 2024 and sell it today you would earn a total of  3.29  from holding Nicola Mining or generate 18.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Nicola Mining  vs.  MIND CTI

Nicola Mining

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nicola Mining are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Nicola Mining reported solid returns over the last few months and may actually be approaching a breakup point.

MIND CTI

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MIND CTI are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, MIND CTI is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Nicola Mining and MIND CTI

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

The idea behind Nicola Mining and MIND CTI 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.