Correlation Between Nicholas and Nicholas Fund
Can any of the company-specific risk be diversified away by investing in both Nicholas and Nicholas Fund 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 Nicholas and Nicholas Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nicholas Ii Inc and Nicholas Fund Inc, you can compare the effects of market volatilities on Nicholas and Nicholas Fund 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 Nicholas with a short position of Nicholas Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nicholas and Nicholas Fund.
Diversification Opportunities for Nicholas and Nicholas Fund
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nicholas and Nicholas is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Nicholas Ii Inc and Nicholas Fund Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicholas Fund and Nicholas 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 Nicholas Ii Inc are associated (or correlated) with Nicholas Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nicholas Fund has no effect on the direction of Nicholas i.e., Nicholas and Nicholas Fund go up and down completely randomly.
Pair Corralation between Nicholas and Nicholas Fund
Assuming the 90 days horizon Nicholas is expected to generate 1.43 times less return on investment than Nicholas Fund. In addition to that, Nicholas is 1.03 times more volatile than Nicholas Fund Inc. It trades about 0.05 of its total potential returns per unit of risk. Nicholas Fund Inc is currently generating about 0.08 per unit of volatility. If you would invest 7,165 in Nicholas Fund Inc on August 26, 2024 and sell it today you would earn a total of 2,851 from holding Nicholas Fund Inc or generate 39.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nicholas Ii Inc vs. Nicholas Fund Inc
Performance |
| Timeline |
| Nicholas Ii |
| Nicholas Fund |
Nicholas and Nicholas Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nicholas and Nicholas Fund
The main advantage of trading using opposite Nicholas and Nicholas Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nicholas position performs unexpectedly, Nicholas Fund 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 Nicholas Fund will offset losses from the drop in Nicholas Fund's long position.| Nicholas vs. Touchstone Sands Capital | Nicholas vs. Mid Cap Value | Nicholas vs. Fidelity Focused High | Nicholas vs. Harding Loevner International |
| Nicholas Fund vs. Nicholas Equity Income | Nicholas Fund vs. Nicholas Ltd Edition | Nicholas Fund vs. Nicholas Ii Inc | Nicholas Fund vs. Nicholas Ltd Edition |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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