Correlation Between Nicola Mining and Strathcona Resources

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

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

Diversification Opportunities for Nicola Mining and Strathcona Resources

-0.6

Correlation Coefficient

Nicola Mining  Strathcona Resources

Excellent diversification

The 3 months correlation between Nicola and Strathcona is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nicola Mining and Strathcona Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strathcona Resources 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 Strathcona Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strathcona Resources has no effect on the direction of Nicola Mining i.e., Nicola Mining and Strathcona Resources go up and down completely randomly.

Pair Corralation between Nicola Mining and Strathcona Resources

Assuming the 90 days horizon Nicola Mining is expected to generate 2.06 times more return on investment than Strathcona Resources. However, Nicola Mining is 2.06 times more volatile than Strathcona Resources. It trades about 0.08 of its potential returns per unit of risk. Strathcona Resources is currently generating about 0.1 per unit of risk. If you would invest  90.00  in Nicola Mining on September 11, 2025 and sell it today you would earn a total of  16.00  from holding Nicola Mining or generate 17.78% return on investment over 90 days.

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

Nicola Mining  vs.  Strathcona Resources

Nicola Mining

Risk-Adjusted Performance

Mild

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

Strathcona Resources

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Strathcona Resources are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Strathcona Resources displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nicola Mining and Strathcona Resources

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

The idea behind Nicola Mining and Strathcona Resources 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.