Correlation Between Linedata Services and Nib Holdings
Can any of the company-specific risk be diversified away by investing in both Linedata Services 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 Linedata Services and Nib Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Linedata Services SA and nib holdings limited, you can compare the effects of market volatilities on Linedata Services 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 Linedata Services with a short position of Nib Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linedata Services and Nib Holdings.
Diversification Opportunities for Linedata Services and Nib Holdings
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Linedata and Nib is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Linedata Services SA 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 Linedata Services 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 Linedata Services SA 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 Linedata Services i.e., Linedata Services and Nib Holdings go up and down completely randomly.
Pair Corralation between Linedata Services and Nib Holdings
Assuming the 90 days trading horizon Linedata Services SA is expected to under-perform the Nib Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Linedata Services SA is 1.31 times less risky than Nib Holdings. The stock trades about -0.05 of its potential returns per unit of risk. The nib holdings limited is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 322.00 in nib holdings limited on November 3, 2024 and sell it today you would earn a total of 16.00 from holding nib holdings limited or generate 4.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Linedata Services SA vs. nib holdings limited
Performance |
| Timeline |
| Linedata Services |
| nib holdings limited |
Linedata Services and Nib Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Linedata Services and Nib Holdings
The main advantage of trading using opposite Linedata Services and Nib Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linedata Services 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.| Linedata Services vs. FORMPIPE SOFTWARE AB | Linedata Services vs. UPDATE SOFTWARE | Linedata Services vs. OPERA SOFTWARE | Linedata Services vs. Easy Software AG |
| Nib Holdings vs. SOCKET MOBILE NEW | Nib Holdings vs. Cleanaway Waste Management | Nib Holdings vs. Chengdu PUTIAN Telecommunications | Nib Holdings vs. Geely Automobile Holdings |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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