Correlation Between NI Holdings and Electrovaya Common
Can any of the company-specific risk be diversified away by investing in both NI Holdings and Electrovaya Common 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 Electrovaya Common into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NI Holdings and Electrovaya Common Shares, you can compare the effects of market volatilities on NI Holdings and Electrovaya Common 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 Electrovaya Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of NI Holdings and Electrovaya Common.
Diversification Opportunities for NI Holdings and Electrovaya Common
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NODK and Electrovaya is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding NI Holdings and Electrovaya Common Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrovaya Common Shares 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 Electrovaya Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrovaya Common Shares has no effect on the direction of NI Holdings i.e., NI Holdings and Electrovaya Common go up and down completely randomly.
Pair Corralation between NI Holdings and Electrovaya Common
Given the investment horizon of 90 days NI Holdings is expected to generate 0.48 times more return on investment than Electrovaya Common. However, NI Holdings is 2.08 times less risky than Electrovaya Common. It trades about 0.07 of its potential returns per unit of risk. Electrovaya Common Shares is currently generating about 0.0 per unit of risk. If you would invest 1,297 in NI Holdings on September 12, 2024 and sell it today you would earn a total of 397.50 from holding NI Holdings or generate 30.65% 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. Electrovaya Common Shares
Performance |
| Timeline |
| NI Holdings |
| Electrovaya Common Shares |
NI Holdings and Electrovaya Common Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NI Holdings and Electrovaya Common
The main advantage of trading using opposite NI Holdings and Electrovaya Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NI Holdings position performs unexpectedly, Electrovaya Common 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 Electrovaya Common will offset losses from the drop in Electrovaya Common'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 |
| Electrovaya Common vs. Monster Beverage Corp | Electrovaya Common vs. Globalfoundries | Electrovaya Common vs. SNDL Inc | Electrovaya Common vs. Nascent Wine |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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