Correlation Between NEM INSURANCE and UNITED BANK
Can any of the company-specific risk be diversified away by investing in both NEM INSURANCE and UNITED BANK 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 NEM INSURANCE and UNITED BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEM INSURANCE PLC and UNITED BANK FOR, you can compare the effects of market volatilities on NEM INSURANCE and UNITED BANK 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 UNITED BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEM INSURANCE and UNITED BANK.
Diversification Opportunities for NEM INSURANCE and UNITED BANK
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NEM and UNITED is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding NEM INSURANCE PLC and UNITED BANK FOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED BANK FOR 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 UNITED BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED BANK FOR has no effect on the direction of NEM INSURANCE i.e., NEM INSURANCE and UNITED BANK go up and down completely randomly.
Pair Corralation between NEM INSURANCE and UNITED BANK
Assuming the 90 days trading horizon NEM INSURANCE is expected to generate 1.01 times less return on investment than UNITED BANK. In addition to that, NEM INSURANCE is 2.29 times more volatile than UNITED BANK FOR. It trades about 0.11 of its total potential returns per unit of risk. UNITED BANK FOR is currently generating about 0.26 per unit of volatility. If you would invest 3,420 in UNITED BANK FOR on November 3, 2024 and sell it today you would earn a total of 350.00 from holding UNITED BANK FOR or generate 10.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEM INSURANCE PLC vs. UNITED BANK FOR
Performance |
| Timeline |
| NEM INSURANCE PLC |
| UNITED BANK FOR |
NEM INSURANCE and UNITED BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEM INSURANCE and UNITED BANK
The main advantage of trading using opposite NEM INSURANCE and UNITED BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEM INSURANCE position performs unexpectedly, UNITED BANK 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 UNITED BANK will offset losses from the drop in UNITED BANK's long position.| NEM INSURANCE vs. LIVINGTRUST MORTGAGE BANK | NEM INSURANCE vs. MULTI TREX INTEGRATED FOODS | NEM INSURANCE vs. ABC TRANSPORT PLC | NEM INSURANCE vs. TRANSCORP HOTELS PLC |
| UNITED BANK vs. ABC TRANSPORT PLC | UNITED BANK vs. FIDSON HEALTHCARE PLC | UNITED BANK vs. INDUSTRIAL MEDICAL GASES | UNITED BANK vs. UNION HOMES REAL |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |