Correlation Between IMPERIAL TOBACCO and Nib Holdings
Can any of the company-specific risk be diversified away by investing in both IMPERIAL TOBACCO 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 IMPERIAL TOBACCO and Nib Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IMPERIAL TOBACCO and nib holdings limited, you can compare the effects of market volatilities on IMPERIAL TOBACCO 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 IMPERIAL TOBACCO with a short position of Nib Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMPERIAL TOBACCO and Nib Holdings.
Diversification Opportunities for IMPERIAL TOBACCO and Nib Holdings
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IMPERIAL and Nib is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding IMPERIAL TOBACCO 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 IMPERIAL TOBACCO 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 IMPERIAL TOBACCO 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 IMPERIAL TOBACCO i.e., IMPERIAL TOBACCO and Nib Holdings go up and down completely randomly.
Pair Corralation between IMPERIAL TOBACCO and Nib Holdings
Assuming the 90 days trading horizon IMPERIAL TOBACCO is expected to generate 0.49 times more return on investment than Nib Holdings. However, IMPERIAL TOBACCO is 2.03 times less risky than Nib Holdings. It trades about -0.07 of its potential returns per unit of risk. nib holdings limited is currently generating about -0.17 per unit of risk. If you would invest 3,096 in IMPERIAL TOBACCO on October 25, 2024 and sell it today you would lose (25.00) from holding IMPERIAL TOBACCO or give up 0.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
IMPERIAL TOBACCO vs. nib holdings limited
Performance |
| Timeline |
| IMPERIAL TOBACCO |
| nib holdings limited |
IMPERIAL TOBACCO and Nib Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IMPERIAL TOBACCO and Nib Holdings
The main advantage of trading using opposite IMPERIAL TOBACCO and Nib Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IMPERIAL TOBACCO 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.| IMPERIAL TOBACCO vs. Minerals Technologies | IMPERIAL TOBACCO vs. Clean Energy Fuels | IMPERIAL TOBACCO vs. SOFI TECHNOLOGIES | IMPERIAL TOBACCO vs. THRACE PLASTICS |
| Nib Holdings vs. PLAY2CHILL SA ZY | Nib Holdings vs. Molson Coors Beverage | Nib Holdings vs. IMPERIAL TOBACCO | Nib Holdings vs. InPlay Oil Corp |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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