Correlation Between Eic Value and Nicholas Fund
Can any of the company-specific risk be diversified away by investing in both Eic Value and Nicholas Fund 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 Eic Value and Nicholas Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eic Value Fund and Nicholas Fund Inc, you can compare the effects of market volatilities on Eic Value and Nicholas Fund 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 Eic Value with a short position of Nicholas Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eic Value and Nicholas Fund.
Diversification Opportunities for Eic Value and Nicholas Fund
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eic and Nicholas is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Eic Value Fund and Nicholas Fund Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicholas Fund and Eic Value 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 Eic Value Fund are associated (or correlated) with Nicholas Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nicholas Fund has no effect on the direction of Eic Value i.e., Eic Value and Nicholas Fund go up and down completely randomly.
Pair Corralation between Eic Value and Nicholas Fund
Assuming the 90 days horizon Eic Value is expected to generate 1.23 times less return on investment than Nicholas Fund. But when comparing it to its historical volatility, Eic Value Fund is 1.22 times less risky than Nicholas Fund. It trades about 0.13 of its potential returns per unit of risk. Nicholas Fund Inc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 8,975 in Nicholas Fund Inc on September 5, 2024 and sell it today you would earn a total of 1,187 from holding Nicholas Fund Inc or generate 13.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Eic Value Fund vs. Nicholas Fund Inc
Performance |
Timeline |
Eic Value Fund |
Nicholas Fund |
Eic Value and Nicholas Fund Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eic Value and Nicholas Fund
The main advantage of trading using opposite Eic Value and Nicholas Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eic Value position performs unexpectedly, Nicholas Fund 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 Nicholas Fund will offset losses from the drop in Nicholas Fund's long position.Eic Value vs. Bbh Intermediate Municipal | Eic Value vs. Ab Impact Municipal | Eic Value vs. California High Yield Municipal | Eic Value vs. Vanguard California Long Term |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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