Correlation Between Lancashire Holdings and Nib Holdings
Can any of the company-specific risk be diversified away by investing in both Lancashire Holdings 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 Lancashire Holdings and Nib Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lancashire Holdings Limited and nib holdings limited, you can compare the effects of market volatilities on Lancashire Holdings 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 Lancashire Holdings with a short position of Nib Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lancashire Holdings and Nib Holdings.
Diversification Opportunities for Lancashire Holdings and Nib Holdings
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lancashire and Nib is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lancashire Holdings Limited 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 Lancashire Holdings 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 Lancashire Holdings Limited 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 Lancashire Holdings i.e., Lancashire Holdings and Nib Holdings go up and down completely randomly.
Pair Corralation between Lancashire Holdings and Nib Holdings
Assuming the 90 days horizon Lancashire Holdings Limited is expected to generate 0.92 times more return on investment than Nib Holdings. However, Lancashire Holdings Limited is 1.09 times less risky than Nib Holdings. It trades about 0.09 of its potential returns per unit of risk. nib holdings limited is currently generating about -0.07 per unit of risk. If you would invest 643.00 in Lancashire Holdings Limited on September 13, 2024 and sell it today you would earn a total of 168.00 from holding Lancashire Holdings Limited or generate 26.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lancashire Holdings Limited vs. nib holdings limited
Performance |
| Timeline |
| Lancashire Holdings |
| nib holdings limited |
Lancashire Holdings and Nib Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lancashire Holdings and Nib Holdings
The main advantage of trading using opposite Lancashire Holdings and Nib Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lancashire Holdings 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.| Lancashire Holdings vs. CN MODERN DAIRY | Lancashire Holdings vs. Tyson Foods | Lancashire Holdings vs. Laureate Education | Lancashire Holdings vs. Xinhua Winshare Publishing |
| Nib Holdings vs. BORR DRILLING NEW | Nib Holdings vs. Pembina Pipeline Corp | Nib Holdings vs. Tri Pointe Homes | Nib Holdings vs. CompuGroup Medical SE |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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