Correlation Between National Reinsurance and Nickel Asia
Can any of the company-specific risk be diversified away by investing in both National Reinsurance and Nickel Asia 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 National Reinsurance and Nickel Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Reinsurance and Nickel Asia Corp, you can compare the effects of market volatilities on National Reinsurance and Nickel Asia 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 National Reinsurance with a short position of Nickel Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Reinsurance and Nickel Asia.
Diversification Opportunities for National Reinsurance and Nickel Asia
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Nickel is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding National Reinsurance and Nickel Asia Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nickel Asia Corp and National Reinsurance 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 National Reinsurance are associated (or correlated) with Nickel Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nickel Asia Corp has no effect on the direction of National Reinsurance i.e., National Reinsurance and Nickel Asia go up and down completely randomly.
Pair Corralation between National Reinsurance and Nickel Asia
Assuming the 90 days trading horizon National Reinsurance is expected to generate 3.21 times more return on investment than Nickel Asia. However, National Reinsurance is 3.21 times more volatile than Nickel Asia Corp. It trades about 0.04 of its potential returns per unit of risk. Nickel Asia Corp is currently generating about -0.04 per unit of risk. If you would invest 56.00 in National Reinsurance on September 14, 2024 and sell it today you would earn a total of 12.00 from holding National Reinsurance or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 59.46% |
| Values | Daily Returns |
National Reinsurance vs. Nickel Asia Corp
Performance |
| Timeline |
| National Reinsurance |
| Nickel Asia Corp |
National Reinsurance and Nickel Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Reinsurance and Nickel Asia
The main advantage of trading using opposite National Reinsurance and Nickel Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Reinsurance position performs unexpectedly, Nickel Asia 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 Nickel Asia will offset losses from the drop in Nickel Asia's long position.| National Reinsurance vs. GT Capital Holdings | National Reinsurance vs. Allhome Corp | National Reinsurance vs. Jollibee Foods Corp | National Reinsurance vs. LFM Properties Corp |
| Nickel Asia vs. Converge Information Communications | Nickel Asia vs. Apex Mining Co | Nickel Asia vs. SM Investments Corp | Nickel Asia vs. National Reinsurance |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Stocks Directory Find actively traded stocks across global markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |