Correlation Between NI Holdings and Naked Wines
Can any of the company-specific risk be diversified away by investing in both NI Holdings and Naked Wines 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 Naked Wines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NI Holdings and Naked Wines plc, you can compare the effects of market volatilities on NI Holdings and Naked Wines 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 Naked Wines. Check out your portfolio center. Please also check ongoing floating volatility patterns of NI Holdings and Naked Wines.
Diversification Opportunities for NI Holdings and Naked Wines
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between NODK and Naked is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding NI Holdings and Naked Wines plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naked Wines plc 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 Naked Wines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naked Wines plc has no effect on the direction of NI Holdings i.e., NI Holdings and Naked Wines go up and down completely randomly.
Pair Corralation between NI Holdings and Naked Wines
If you would invest 1,544 in NI Holdings on September 3, 2024 and sell it today you would earn a total of 35.00 from holding NI Holdings or generate 2.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
NI Holdings vs. Naked Wines plc
Performance |
| Timeline |
| NI Holdings |
| Naked Wines plc |
NI Holdings and Naked Wines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NI Holdings and Naked Wines
The main advantage of trading using opposite NI Holdings and Naked Wines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NI Holdings position performs unexpectedly, Naked Wines 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 Naked Wines will offset losses from the drop in Naked Wines' 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 |
| Naked Wines vs. Diageo PLC ADR | Naked Wines vs. Constellation Brands Class | Naked Wines vs. Brown Forman | Naked Wines vs. Thai Beverage PCL |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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