Correlation Between Nib Holdings and Trupanion
Can any of the company-specific risk be diversified away by investing in both Nib Holdings and Trupanion 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 Nib Holdings and Trupanion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between nib holdings limited and Trupanion, you can compare the effects of market volatilities on Nib Holdings and Trupanion 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 Nib Holdings with a short position of Trupanion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nib Holdings and Trupanion.
Diversification Opportunities for Nib Holdings and Trupanion
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nib and Trupanion is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding nib holdings limited and Trupanion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trupanion and Nib Holdings 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 nib holdings limited are associated (or correlated) with Trupanion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trupanion has no effect on the direction of Nib Holdings i.e., Nib Holdings and Trupanion go up and down completely randomly.
Pair Corralation between Nib Holdings and Trupanion
Assuming the 90 days horizon nib holdings limited is expected to generate 0.59 times more return on investment than Trupanion. However, nib holdings limited is 1.7 times less risky than Trupanion. It trades about 0.12 of its potential returns per unit of risk. Trupanion is currently generating about -0.02 per unit of risk. If you would invest 322.00 in nib holdings limited on November 2, 2024 and sell it today you would earn a total of 12.00 from holding nib holdings limited or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
nib holdings limited vs. Trupanion
Performance |
| Timeline |
| nib holdings limited |
| Trupanion |
Nib Holdings and Trupanion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nib Holdings and Trupanion
The main advantage of trading using opposite Nib Holdings and Trupanion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nib Holdings position performs unexpectedly, Trupanion 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 Trupanion will offset losses from the drop in Trupanion's long position.| Nib Holdings vs. Mapfre SA | Nib Holdings vs. MGIC Investment | Nib Holdings vs. Assured Guaranty | Nib Holdings vs. Radian Group |
| Trupanion vs. Mapfre SA | Trupanion vs. MGIC Investment | Trupanion vs. Assured Guaranty | Trupanion vs. Radian Group |
Check out your portfolio center.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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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