Correlation Between NI Holdings and Vodka Brands
Can any of the company-specific risk be diversified away by investing in both NI Holdings and Vodka Brands 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 Vodka Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NI Holdings and Vodka Brands Corp, you can compare the effects of market volatilities on NI Holdings and Vodka Brands 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 Vodka Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of NI Holdings and Vodka Brands.
Diversification Opportunities for NI Holdings and Vodka Brands
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NODK and Vodka is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding NI Holdings and Vodka Brands Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodka Brands Corp 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 Vodka Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodka Brands Corp has no effect on the direction of NI Holdings i.e., NI Holdings and Vodka Brands go up and down completely randomly.
Pair Corralation between NI Holdings and Vodka Brands
Given the investment horizon of 90 days NI Holdings is expected to generate 4.86 times less return on investment than Vodka Brands. But when comparing it to its historical volatility, NI Holdings is 4.94 times less risky than Vodka Brands. It trades about 0.03 of its potential returns per unit of risk. Vodka Brands Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 200.00 in Vodka Brands Corp on September 2, 2024 and sell it today you would lose (88.00) from holding Vodka Brands Corp or give up 44.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
NI Holdings vs. Vodka Brands Corp
Performance |
| Timeline |
| NI Holdings |
| Vodka Brands Corp |
NI Holdings and Vodka Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NI Holdings and Vodka Brands
The main advantage of trading using opposite NI Holdings and Vodka Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NI Holdings position performs unexpectedly, Vodka Brands 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 Vodka Brands will offset losses from the drop in Vodka Brands' 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 |
| Vodka Brands vs. Diageo PLC ADR | Vodka Brands vs. Pernod Ricard SA | Vodka Brands vs. Constellation Brands Class | Vodka Brands vs. Brown Forman |
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.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |