Correlation Between NI Holdings and Kura Sushi
Can any of the company-specific risk be diversified away by investing in both NI Holdings and Kura Sushi 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 Kura Sushi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NI Holdings and Kura Sushi USA, you can compare the effects of market volatilities on NI Holdings and Kura Sushi 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 Kura Sushi. Check out your portfolio center. Please also check ongoing floating volatility patterns of NI Holdings and Kura Sushi.
Diversification Opportunities for NI Holdings and Kura Sushi
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NODK and Kura is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding NI Holdings and Kura Sushi USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kura Sushi USA 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 Kura Sushi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kura Sushi USA has no effect on the direction of NI Holdings i.e., NI Holdings and Kura Sushi go up and down completely randomly.
Pair Corralation between NI Holdings and Kura Sushi
Given the investment horizon of 90 days NI Holdings is expected to generate 3.96 times less return on investment than Kura Sushi. But when comparing it to its historical volatility, NI Holdings is 2.57 times less risky than Kura Sushi. It trades about 0.02 of its potential returns per unit of risk. Kura Sushi USA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 8,476 in Kura Sushi USA on August 31, 2024 and sell it today you would earn a total of 2,216 from holding Kura Sushi USA or generate 26.14% 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. Kura Sushi USA
Performance |
| Timeline |
| NI Holdings |
| Kura Sushi USA |
NI Holdings and Kura Sushi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NI Holdings and Kura Sushi
The main advantage of trading using opposite NI Holdings and Kura Sushi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NI Holdings position performs unexpectedly, Kura Sushi 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 Kura Sushi will offset losses from the drop in Kura Sushi'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 |
| Kura Sushi vs. RLJ Lodging Trust | Kura Sushi vs. Aquagold International | Kura Sushi vs. Stepstone Group | Kura Sushi vs. Morningstar Unconstrained Allocation |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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