Correlation Between ASSOC BR and Nib Holdings
Can any of the company-specific risk be diversified away by investing in both ASSOC BR and Nib Holdings 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 ASSOC BR and Nib Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASSOC BR FOODS and nib holdings limited, you can compare the effects of market volatilities on ASSOC BR and Nib Holdings 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 ASSOC BR with a short position of Nib Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASSOC BR and Nib Holdings.
Diversification Opportunities for ASSOC BR and Nib Holdings
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ASSOC and Nib is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding ASSOC BR FOODS and nib holdings limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on nib holdings limited and ASSOC BR 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 ASSOC BR FOODS are associated (or correlated) with Nib Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of nib holdings limited has no effect on the direction of ASSOC BR i.e., ASSOC BR and Nib Holdings go up and down completely randomly.
Pair Corralation between ASSOC BR and Nib Holdings
Assuming the 90 days trading horizon ASSOC BR FOODS is expected to under-perform the Nib Holdings. But the stock apears to be less risky and, when comparing its historical volatility, ASSOC BR FOODS is 1.14 times less risky than Nib Holdings. The stock trades about -0.13 of its potential returns per unit of risk. The nib holdings limited is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 342.00 in nib holdings limited on September 15, 2024 and sell it today you would lose (10.00) from holding nib holdings limited or give up 2.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASSOC BR FOODS vs. nib holdings limited
Performance |
| Timeline |
| ASSOC BR FOODS |
| nib holdings limited |
ASSOC BR and Nib Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASSOC BR and Nib Holdings
The main advantage of trading using opposite ASSOC BR and Nib Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASSOC BR position performs unexpectedly, Nib Holdings 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 Nib Holdings will offset losses from the drop in Nib Holdings' long position.| ASSOC BR vs. DELTA AIR LINES | ASSOC BR vs. TEXAS ROADHOUSE | ASSOC BR vs. ALTAIR RES INC | ASSOC BR vs. Ryanair Holdings plc |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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