Correlation Between Astar and Nib Holdings
Can any of the company-specific risk be diversified away by investing in both Astar 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 Astar and Nib Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and nib holdings limited, you can compare the effects of market volatilities on Astar 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 Astar with a short position of Nib Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Nib Holdings.
Diversification Opportunities for Astar and Nib Holdings
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Astar and Nib is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Astar 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 Astar 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 Astar 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 Astar i.e., Astar and Nib Holdings go up and down completely randomly.
Pair Corralation between Astar and Nib Holdings
Assuming the 90 days trading horizon Astar is expected to generate 4.13 times less return on investment than Nib Holdings. In addition to that, Astar is 1.73 times more volatile than nib holdings limited. It trades about 0.05 of its total potential returns per unit of risk. nib holdings limited is currently generating about 0.34 per unit of volatility. If you would invest 272.00 in nib holdings limited on October 20, 2024 and sell it today you would earn a total of 52.00 from holding nib holdings limited or generate 19.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.82% |
| Values | Daily Returns |
Astar vs. nib holdings limited
Performance |
| Timeline |
| Astar |
| nib holdings limited |
Astar and Nib Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Nib Holdings
The main advantage of trading using opposite Astar and Nib Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar 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.The idea behind Astar and nib holdings limited 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.| Nib Holdings vs. Mapfre SA | Nib Holdings vs. First American Financial | Nib Holdings vs. Assured Guaranty | Nib Holdings vs. Trupanion |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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