Correlation Between NICO HOLDINGS and NATIONAL INVESTMENT
Can any of the company-specific risk be diversified away by investing in both NICO HOLDINGS and NATIONAL 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 NICO HOLDINGS and NATIONAL INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NICO HOLDINGS LIMITED and NATIONAL INVESTMENT TRUST, you can compare the effects of market volatilities on NICO HOLDINGS and NATIONAL 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 NICO HOLDINGS with a short position of NATIONAL INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of NICO HOLDINGS and NATIONAL INVESTMENT.
Diversification Opportunities for NICO HOLDINGS and NATIONAL INVESTMENT
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NICO and NATIONAL is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding NICO HOLDINGS LIMITED and NATIONAL INVESTMENT TRUST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NATIONAL INVESTMENT TRUST and NICO 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 NICO HOLDINGS LIMITED are associated (or correlated) with NATIONAL INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NATIONAL INVESTMENT TRUST has no effect on the direction of NICO HOLDINGS i.e., NICO HOLDINGS and NATIONAL INVESTMENT go up and down completely randomly.
Pair Corralation between NICO HOLDINGS and NATIONAL INVESTMENT
If you would invest 44,000 in NATIONAL INVESTMENT TRUST on October 21, 2024 and sell it today you would earn a total of 0.00 from holding NATIONAL INVESTMENT TRUST or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NICO HOLDINGS LIMITED vs. NATIONAL INVESTMENT TRUST
Performance |
| Timeline |
| NICO HOLDINGS LIMITED |
| NATIONAL INVESTMENT TRUST |
NICO HOLDINGS and NATIONAL INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NICO HOLDINGS and NATIONAL INVESTMENT
The main advantage of trading using opposite NICO HOLDINGS and NATIONAL INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NICO HOLDINGS position performs unexpectedly, NATIONAL 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 NATIONAL INVESTMENT will offset losses from the drop in NATIONAL INVESTMENT's long position.| NICO HOLDINGS vs. AIRTEL MALAWI PLC | NICO HOLDINGS vs. STANDARD BANK LIMITED | NICO HOLDINGS vs. NBS BANK LIMITED | NICO HOLDINGS vs. SUNBIRD HOTELS TOURISM |
| NATIONAL INVESTMENT vs. AIRTEL MALAWI PLC | NATIONAL INVESTMENT vs. STANDARD BANK LIMITED | NATIONAL INVESTMENT vs. NBS BANK LIMITED | NATIONAL INVESTMENT vs. SUNBIRD HOTELS TOURISM |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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