Correlation Between NI Holdings and Summit Environmental
Can any of the company-specific risk be diversified away by investing in both NI Holdings and Summit Environmental 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 Summit Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NI Holdings and Summit Environmental, you can compare the effects of market volatilities on NI Holdings and Summit Environmental 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 Summit Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of NI Holdings and Summit Environmental.
Diversification Opportunities for NI Holdings and Summit Environmental
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NODK and Summit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NI Holdings and Summit Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Environmental 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 Summit Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Environmental has no effect on the direction of NI Holdings i.e., NI Holdings and Summit Environmental go up and down completely randomly.
Pair Corralation between NI Holdings and Summit Environmental
If you would invest 1,585 in NI Holdings on August 28, 2024 and sell it today you would earn a total of 32.00 from holding NI Holdings or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NI Holdings vs. Summit Environmental
Performance |
| Timeline |
| NI Holdings |
| Summit Environmental |
NI Holdings and Summit Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NI Holdings and Summit Environmental
The main advantage of trading using opposite NI Holdings and Summit Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NI Holdings position performs unexpectedly, Summit Environmental 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 Summit Environmental will offset losses from the drop in Summit Environmental'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 |
| Summit Environmental vs. Origin Materials | Summit Environmental vs. NL Industries | Summit Environmental vs. Highway Holdings Limited | Summit Environmental vs. Hurco Companies |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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