Correlation Between NIP Group and Flexible Solutions
Can any of the company-specific risk be diversified away by investing in both NIP Group and Flexible Solutions 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 Flexible Solutions 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 Flexible Solutions International, you can compare the effects of market volatilities on NIP Group and Flexible Solutions 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 Flexible Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIP Group and Flexible Solutions.
Diversification Opportunities for NIP Group and Flexible Solutions
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NIP and Flexible is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding NIP Group American and Flexible Solutions Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexible Solutions 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 Flexible Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexible Solutions has no effect on the direction of NIP Group i.e., NIP Group and Flexible Solutions go up and down completely randomly.
Pair Corralation between NIP Group and Flexible Solutions
Given the investment horizon of 90 days NIP Group is expected to generate 4.9 times less return on investment than Flexible Solutions. In addition to that, NIP Group is 2.39 times more volatile than Flexible Solutions International. It trades about 0.01 of its total potential returns per unit of risk. Flexible Solutions International is currently generating about 0.15 per unit of volatility. If you would invest 197.00 in Flexible Solutions International on September 12, 2024 and sell it today you would earn a total of 181.00 from holding Flexible Solutions International or generate 91.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 77.42% |
| Values | Daily Returns |
NIP Group American vs. Flexible Solutions Internation
Performance |
| Timeline |
| NIP Group American |
| Flexible Solutions |
NIP Group and Flexible Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIP Group and Flexible Solutions
The main advantage of trading using opposite NIP Group and Flexible Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIP Group position performs unexpectedly, Flexible Solutions 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 Flexible Solutions will offset losses from the drop in Flexible Solutions' long position.| NIP Group vs. Apogee Enterprises | NIP Group vs. Franklin Street Properties | NIP Group vs. Highway Holdings Limited | NIP Group vs. MI Homes |
| Flexible Solutions vs. Orion Engineered Carbons | Flexible Solutions vs. International Flavors Fragrances | Flexible Solutions vs. Sociedad Quimica y | Flexible Solutions vs. Albemarle Corp |
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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