Correlation Between NEM INSURANCE and STERLING FINANCIAL
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By analyzing existing cross correlation between NEM INSURANCE PLC and STERLING FINANCIAL HOLDINGS, you can compare the effects of market volatilities on NEM INSURANCE and STERLING 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 NEM INSURANCE with a short position of STERLING FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEM INSURANCE and STERLING FINANCIAL.
Diversification Opportunities for NEM INSURANCE and STERLING FINANCIAL
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NEM and STERLING is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding NEM INSURANCE PLC and STERLING FINANCIAL HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STERLING FINANCIAL and NEM INSURANCE 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 NEM INSURANCE PLC are associated (or correlated) with STERLING FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STERLING FINANCIAL has no effect on the direction of NEM INSURANCE i.e., NEM INSURANCE and STERLING FINANCIAL go up and down completely randomly.
Pair Corralation between NEM INSURANCE and STERLING FINANCIAL
Assuming the 90 days trading horizon NEM INSURANCE PLC is expected to generate 1.19 times more return on investment than STERLING FINANCIAL. However, NEM INSURANCE is 1.19 times more volatile than STERLING FINANCIAL HOLDINGS. It trades about 0.26 of its potential returns per unit of risk. STERLING FINANCIAL HOLDINGS is currently generating about -0.02 per unit of risk. If you would invest 1,080 in NEM INSURANCE PLC on October 24, 2024 and sell it today you would earn a total of 205.00 from holding NEM INSURANCE PLC or generate 18.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEM INSURANCE PLC vs. STERLING FINANCIAL HOLDINGS
Performance |
| Timeline |
| NEM INSURANCE PLC |
| STERLING FINANCIAL |
NEM INSURANCE and STERLING FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEM INSURANCE and STERLING FINANCIAL
The main advantage of trading using opposite NEM INSURANCE and STERLING FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEM INSURANCE position performs unexpectedly, STERLING 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 STERLING FINANCIAL will offset losses from the drop in STERLING FINANCIAL's long position.| NEM INSURANCE vs. AXAMANSARD INSURANCE PLC | NEM INSURANCE vs. CONSOLIDATED HALLMARK INSURANCE | NEM INSURANCE vs. GOLDLINK INSURANCE PLC | NEM INSURANCE vs. AFRICAN ALLIANCE INSURANCE |
| STERLING FINANCIAL vs. CONSOLIDATED HALLMARK INSURANCE | STERLING FINANCIAL vs. UNITED BANK FOR | STERLING FINANCIAL vs. NEM INSURANCE PLC | STERLING FINANCIAL vs. INTERNATIONAL ENERGY INSURANCE |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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