Correlation Between NI Holdings and Mercury General
Can any of the company-specific risk be diversified away by investing in both NI Holdings and Mercury General 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 Mercury General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NI Holdings and Mercury General, you can compare the effects of market volatilities on NI Holdings and Mercury General 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 Mercury General. Check out your portfolio center. Please also check ongoing floating volatility patterns of NI Holdings and Mercury General.
Diversification Opportunities for NI Holdings and Mercury General
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NODK and Mercury is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding NI Holdings and Mercury General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercury General 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 Mercury General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercury General has no effect on the direction of NI Holdings i.e., NI Holdings and Mercury General go up and down completely randomly.
Pair Corralation between NI Holdings and Mercury General
Given the investment horizon of 90 days NI Holdings is expected to generate 2.59 times less return on investment than Mercury General. But when comparing it to its historical volatility, NI Holdings is 2.73 times less risky than Mercury General. It trades about 0.25 of its potential returns per unit of risk. Mercury General is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 6,784 in Mercury General on August 27, 2024 and sell it today you would earn a total of 943.00 from holding Mercury General or generate 13.9% 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. Mercury General
Performance |
| Timeline |
| NI Holdings |
| Mercury General |
NI Holdings and Mercury General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NI Holdings and Mercury General
The main advantage of trading using opposite NI Holdings and Mercury General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NI Holdings position performs unexpectedly, Mercury General 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 Mercury General will offset losses from the drop in Mercury General'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 |
| Mercury General vs. Selective Insurance Group | Mercury General vs. Kemper | Mercury General vs. Donegal Group B | Mercury General vs. Argo Group International |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |