Correlation Between NI Holdings and BTS Group
Can any of the company-specific risk be diversified away by investing in both NI Holdings and BTS Group 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 NI Holdings and BTS Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NI Holdings and BTS Group Holdings, you can compare the effects of market volatilities on NI Holdings and BTS Group 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 NI Holdings with a short position of BTS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NI Holdings and BTS Group.
Diversification Opportunities for NI Holdings and BTS Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NODK and BTS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NI Holdings and BTS Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTS Group Holdings and NI 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 NI Holdings are associated (or correlated) with BTS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTS Group Holdings has no effect on the direction of NI Holdings i.e., NI Holdings and BTS Group go up and down completely randomly.
Pair Corralation between NI Holdings and BTS Group
Given the investment horizon of 90 days NI Holdings is expected to generate 1.25 times more return on investment than BTS Group. However, NI Holdings is 1.25 times more volatile than BTS Group Holdings. It trades about 0.03 of its potential returns per unit of risk. BTS Group Holdings is currently generating about -0.01 per unit of risk. If you would invest 1,397 in NI Holdings on September 3, 2024 and sell it today you would earn a total of 217.00 from holding NI Holdings or generate 15.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NI Holdings vs. BTS Group Holdings
Performance |
| Timeline |
| NI Holdings |
| BTS Group Holdings |
NI Holdings and BTS Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NI Holdings and BTS Group
The main advantage of trading using opposite NI Holdings and BTS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NI Holdings position performs unexpectedly, BTS Group 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 BTS Group will offset losses from the drop in BTS Group's long position.| NI Holdings vs. Horace Mann Educators | NI Holdings vs. Donegal Group A | NI Holdings vs. Global Indemnity PLC | NI Holdings vs. Selective Insurance Group |
| BTS Group vs. LB Foster | BTS Group vs. Norfolk Southern | BTS Group vs. Union Pacific | BTS Group vs. Canadian Pacific Railway |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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