Correlation Between NI Holdings and Citizens
Can any of the company-specific risk be diversified away by investing in both NI Holdings and Citizens 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 Citizens into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NI Holdings and Citizens, you can compare the effects of market volatilities on NI Holdings and Citizens 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 Citizens. Check out your portfolio center. Please also check ongoing floating volatility patterns of NI Holdings and Citizens.
Diversification Opportunities for NI Holdings and Citizens
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NODK and Citizens is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding NI Holdings and Citizens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens 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 Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens has no effect on the direction of NI Holdings i.e., NI Holdings and Citizens go up and down completely randomly.
Pair Corralation between NI Holdings and Citizens
Given the investment horizon of 90 days NI Holdings is expected to generate 0.37 times more return on investment than Citizens. However, NI Holdings is 2.7 times less risky than Citizens. It trades about 0.07 of its potential returns per unit of risk. Citizens is currently generating about -0.07 per unit of risk. If you would invest 1,585 in NI Holdings on August 31, 2024 and sell it today you would earn a total of 29.00 from holding NI Holdings or generate 1.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NI Holdings vs. Citizens
Performance |
| Timeline |
| NI Holdings |
| Citizens |
NI Holdings and Citizens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NI Holdings and Citizens
The main advantage of trading using opposite NI Holdings and Citizens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NI Holdings position performs unexpectedly, Citizens 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 Citizens will offset losses from the drop in Citizens' 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 |
| Citizens vs. Lincoln National | Citizens vs. Aflac Incorporated | Citizens vs. Unum Group | Citizens vs. Manulife Financial 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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