Correlation Between NI Holdings and Baldwin Insurance
Can any of the company-specific risk be diversified away by investing in both NI Holdings and Baldwin Insurance 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 Baldwin Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NI Holdings and The Baldwin Insurance, you can compare the effects of market volatilities on NI Holdings and Baldwin Insurance 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 Baldwin Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of NI Holdings and Baldwin Insurance.
Diversification Opportunities for NI Holdings and Baldwin Insurance
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NODK and Baldwin is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding NI Holdings and The Baldwin Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baldwin Insurance 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 Baldwin Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baldwin Insurance has no effect on the direction of NI Holdings i.e., NI Holdings and Baldwin Insurance go up and down completely randomly.
Pair Corralation between NI Holdings and Baldwin Insurance
Given the investment horizon of 90 days NI Holdings is expected to generate 0.59 times more return on investment than Baldwin Insurance. However, NI Holdings is 1.7 times less risky than Baldwin Insurance. It trades about 0.24 of its potential returns per unit of risk. The Baldwin Insurance is currently generating about -0.23 per unit of risk. If you would invest 1,573 in NI Holdings on September 12, 2024 and sell it today you would earn a total of 128.00 from holding NI Holdings or generate 8.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
NI Holdings vs. The Baldwin Insurance
Performance |
| Timeline |
| NI Holdings |
| Baldwin Insurance |
NI Holdings and Baldwin Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NI Holdings and Baldwin Insurance
The main advantage of trading using opposite NI Holdings and Baldwin Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NI Holdings position performs unexpectedly, Baldwin Insurance 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 Baldwin Insurance will offset losses from the drop in Baldwin Insurance'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 |
| Baldwin Insurance vs. Albertsons Companies | Baldwin Insurance vs. NH Foods Ltd | Baldwin Insurance vs. Bridgford Foods | Baldwin Insurance vs. Sligro Food 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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