Correlation Between NI Holdings and Stewart Information
Can any of the company-specific risk be diversified away by investing in both NI Holdings and Stewart Information 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 Stewart Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NI Holdings and Stewart Information Services, you can compare the effects of market volatilities on NI Holdings and Stewart Information 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 Stewart Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of NI Holdings and Stewart Information.
Diversification Opportunities for NI Holdings and Stewart Information
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NODK and Stewart is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding NI Holdings and Stewart Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stewart Information 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 Stewart Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stewart Information has no effect on the direction of NI Holdings i.e., NI Holdings and Stewart Information go up and down completely randomly.
Pair Corralation between NI Holdings and Stewart Information
Given the investment horizon of 90 days NI Holdings is expected to generate 14.54 times less return on investment than Stewart Information. But when comparing it to its historical volatility, NI Holdings is 1.16 times less risky than Stewart Information. It trades about 0.02 of its potential returns per unit of risk. Stewart Information Services is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 6,925 in Stewart Information Services on August 31, 2024 and sell it today you would earn a total of 621.00 from holding Stewart Information Services or generate 8.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NI Holdings vs. Stewart Information Services
Performance |
| Timeline |
| NI Holdings |
| Stewart Information |
NI Holdings and Stewart Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NI Holdings and Stewart Information
The main advantage of trading using opposite NI Holdings and Stewart Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NI Holdings position performs unexpectedly, Stewart Information 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 Stewart Information will offset losses from the drop in Stewart Information'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 |
| Stewart Information vs. Selective Insurance Group | Stewart Information vs. Kemper | Stewart Information vs. Donegal Group B | Stewart Information 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |