Correlation Between HP and Nicholas Financial
Can any of the company-specific risk be diversified away by investing in both HP and Nicholas Financial 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 HP and Nicholas Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HP Inc and Nicholas Financial, you can compare the effects of market volatilities on HP and Nicholas Financial 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 HP with a short position of Nicholas Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and Nicholas Financial.
Diversification Opportunities for HP and Nicholas Financial
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HP and Nicholas is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and Nicholas Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicholas Financial and HP 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 HP Inc are associated (or correlated) with Nicholas Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nicholas Financial has no effect on the direction of HP i.e., HP and Nicholas Financial go up and down completely randomly.
Pair Corralation between HP and Nicholas Financial
If you would invest 619.00 in Nicholas Financial on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Nicholas Financial or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
HP Inc vs. Nicholas Financial
Performance |
| Timeline |
| HP Inc |
| Nicholas Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
HP and Nicholas Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HP and Nicholas Financial
The main advantage of trading using opposite HP and Nicholas Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HP position performs unexpectedly, Nicholas Financial 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 Financial will offset losses from the drop in Nicholas Financial's long position.The idea behind HP Inc and Nicholas Financial 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.| Nicholas Financial vs. Regional Management Corp | Nicholas Financial vs. Orix Corp Ads | Nicholas Financial vs. FirstCash | Nicholas Financial vs. Finance of America |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |