Correlation Between NIP Group and Alliance Entertainment
Can any of the company-specific risk be diversified away by investing in both NIP Group and Alliance Entertainment 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 NIP Group and Alliance Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NIP Group American and Alliance Entertainment Holding, you can compare the effects of market volatilities on NIP Group and Alliance Entertainment 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 NIP Group with a short position of Alliance Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIP Group and Alliance Entertainment.
Diversification Opportunities for NIP Group and Alliance Entertainment
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NIP and Alliance is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding NIP Group American and Alliance Entertainment Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Entertainment and NIP Group 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 NIP Group American are associated (or correlated) with Alliance Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Entertainment has no effect on the direction of NIP Group i.e., NIP Group and Alliance Entertainment go up and down completely randomly.
Pair Corralation between NIP Group and Alliance Entertainment
Given the investment horizon of 90 days NIP Group American is expected to under-perform the Alliance Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, NIP Group American is 11.37 times less risky than Alliance Entertainment. The stock trades about -0.13 of its potential returns per unit of risk. The Alliance Entertainment Holding is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 6.06 in Alliance Entertainment Holding on August 31, 2024 and sell it today you would earn a total of 12.94 from holding Alliance Entertainment Holding or generate 213.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
NIP Group American vs. Alliance Entertainment Holding
Performance |
| Timeline |
| NIP Group American |
| Alliance Entertainment |
NIP Group and Alliance Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIP Group and Alliance Entertainment
The main advantage of trading using opposite NIP Group and Alliance Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIP Group position performs unexpectedly, Alliance Entertainment 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 Alliance Entertainment will offset losses from the drop in Alliance Entertainment's long position.| NIP Group vs. Analog Devices | NIP Group vs. Life Time Group | NIP Group vs. Hasbro Inc | NIP Group vs. NextNav Warrant |
| Alliance Entertainment vs. Simon Property Group | Alliance Entertainment vs. Genuine Parts Co | Alliance Entertainment vs. National Vision Holdings | Alliance Entertainment vs. Asbury Automotive Group |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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