Correlation Between NI Holdings and Compania Cervecerias
Can any of the company-specific risk be diversified away by investing in both NI Holdings and Compania Cervecerias 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 Compania Cervecerias into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NI Holdings and Compania Cervecerias Unidas, you can compare the effects of market volatilities on NI Holdings and Compania Cervecerias 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 Compania Cervecerias. Check out your portfolio center. Please also check ongoing floating volatility patterns of NI Holdings and Compania Cervecerias.
Diversification Opportunities for NI Holdings and Compania Cervecerias
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NODK and Compania is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding NI Holdings and Compania Cervecerias Unidas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Cervecerias 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 Compania Cervecerias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Cervecerias has no effect on the direction of NI Holdings i.e., NI Holdings and Compania Cervecerias go up and down completely randomly.
Pair Corralation between NI Holdings and Compania Cervecerias
Given the investment horizon of 90 days NI Holdings is expected to generate 0.73 times more return on investment than Compania Cervecerias. However, NI Holdings is 1.37 times less risky than Compania Cervecerias. It trades about 0.02 of its potential returns per unit of risk. Compania Cervecerias Unidas is currently generating about -0.04 per unit of risk. If you would invest 1,585 in NI Holdings on August 29, 2024 and sell it today you would earn a total of 7.00 from holding NI Holdings or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NI Holdings vs. Compania Cervecerias Unidas
Performance |
| Timeline |
| NI Holdings |
| Compania Cervecerias |
NI Holdings and Compania Cervecerias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NI Holdings and Compania Cervecerias
The main advantage of trading using opposite NI Holdings and Compania Cervecerias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NI Holdings position performs unexpectedly, Compania Cervecerias 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 Compania Cervecerias will offset losses from the drop in Compania Cervecerias' long position.| NI Holdings vs. Argo Group International | NI Holdings vs. Donegal Group A | NI Holdings vs. Selective Insurance Group |
| Compania Cervecerias vs. Fomento Economico Mexicano | Compania Cervecerias vs. Carlsberg AS | Compania Cervecerias vs. Molson Coors Beverage | Compania Cervecerias vs. Molson Coors Brewing |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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