Correlation Between NB Private and Hansa Investment
Can any of the company-specific risk be diversified away by investing in both NB Private and Hansa Investment 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 NB Private and Hansa Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NB Private Equity and Hansa Investment, you can compare the effects of market volatilities on NB Private and Hansa Investment 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 NB Private with a short position of Hansa Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of NB Private and Hansa Investment.
Diversification Opportunities for NB Private and Hansa Investment
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between NBPE and Hansa is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding NB Private Equity and Hansa Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansa Investment and NB Private 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 NB Private Equity are associated (or correlated) with Hansa Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansa Investment has no effect on the direction of NB Private i.e., NB Private and Hansa Investment go up and down completely randomly.
Pair Corralation between NB Private and Hansa Investment
Assuming the 90 days trading horizon NB Private Equity is expected to under-perform the Hansa Investment. But the stock apears to be less risky and, when comparing its historical volatility, NB Private Equity is 1.04 times less risky than Hansa Investment. The stock trades about -0.09 of its potential returns per unit of risk. The Hansa Investment is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 22,099 in Hansa Investment on August 30, 2024 and sell it today you would lose (699.00) from holding Hansa Investment or give up 3.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
NB Private Equity vs. Hansa Investment
Performance |
| Timeline |
| NB Private Equity |
| Hansa Investment |
NB Private and Hansa Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NB Private and Hansa Investment
The main advantage of trading using opposite NB Private and Hansa Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NB Private position performs unexpectedly, Hansa Investment 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 Hansa Investment will offset losses from the drop in Hansa Investment's long position.| NB Private vs. Fulcrum Metals PLC | NB Private vs. Delta Air Lines | NB Private vs. Silvercorp Metals | NB Private vs. Golden Metal Resources |
| Hansa Investment vs. CATCo Reinsurance Opportunities | Hansa Investment vs. Intermediate Capital Group | Hansa Investment vs. FC Investment Trust | Hansa Investment vs. MG Plc |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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