Correlation Between Vita Coco and NI Holdings
Can any of the company-specific risk be diversified away by investing in both Vita Coco and NI 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 Vita Coco and NI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vita Coco and NI Holdings, you can compare the effects of market volatilities on Vita Coco and NI 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 Vita Coco with a short position of NI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vita Coco and NI Holdings.
Diversification Opportunities for Vita Coco and NI Holdings
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vita and NODK is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Vita Coco and NI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NI Holdings and Vita Coco 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 Vita Coco are associated (or correlated) with NI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NI Holdings has no effect on the direction of Vita Coco i.e., Vita Coco and NI Holdings go up and down completely randomly.
Pair Corralation between Vita Coco and NI Holdings
Given the investment horizon of 90 days Vita Coco is expected to generate 2.39 times more return on investment than NI Holdings. However, Vita Coco is 2.39 times more volatile than NI Holdings. It trades about 0.29 of its potential returns per unit of risk. NI Holdings is currently generating about 0.02 per unit of risk. If you would invest 2,960 in Vita Coco on August 29, 2024 and sell it today you would earn a total of 602.00 from holding Vita Coco or generate 20.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vita Coco vs. NI Holdings
Performance |
| Timeline |
| Vita Coco |
| NI Holdings |
Vita Coco and NI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vita Coco and NI Holdings
The main advantage of trading using opposite Vita Coco and NI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vita Coco position performs unexpectedly, NI 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 NI Holdings will offset losses from the drop in NI Holdings' long position.| Vita Coco vs. Celsius Holdings | Vita Coco vs. Coca Cola European Partners | Vita Coco vs. Capital Income Builder | Vita Coco vs. Direxion Daily FTSE |
| NI Holdings vs. Argo Group International | NI Holdings vs. Donegal Group A | NI Holdings vs. Selective Insurance 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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