Correlation Between Trump Media and NI Holdings
Can any of the company-specific risk be diversified away by investing in both Trump Media 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 Trump Media and NI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trump Media Technology and NI Holdings, you can compare the effects of market volatilities on Trump Media 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 Trump Media with a short position of NI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trump Media and NI Holdings.
Diversification Opportunities for Trump Media and NI Holdings
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Trump and NODK is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Trump Media Technology and NI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NI Holdings and Trump Media 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 Trump Media Technology 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 Trump Media i.e., Trump Media and NI Holdings go up and down completely randomly.
Pair Corralation between Trump Media and NI Holdings
Assuming the 90 days horizon Trump Media Technology is expected to generate 5.66 times more return on investment than NI Holdings. However, Trump Media is 5.66 times more volatile than NI Holdings. It trades about 0.06 of its potential returns per unit of risk. NI Holdings is currently generating about 0.05 per unit of risk. If you would invest 2,301 in Trump Media Technology on September 13, 2024 and sell it today you would earn a total of 247.00 from holding Trump Media Technology or generate 10.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trump Media Technology vs. NI Holdings
Performance |
| Timeline |
| Trump Media Technology |
| NI Holdings |
Trump Media and NI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trump Media and NI Holdings
The main advantage of trading using opposite Trump Media and NI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trump Media 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.| Trump Media vs. Westrock Coffee | Trump Media vs. Ark Restaurants Corp | Trump Media vs. Willamette Valley Vineyards | Trump Media vs. Rave Restaurant Group |
| NI Holdings vs. Horace Mann Educators | NI Holdings vs. Donegal Group A | NI Holdings vs. Global Indemnity PLC | 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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