Correlation Between Trisura and Nib Holdings
Can any of the company-specific risk be diversified away by investing in both Trisura and Nib Holdings 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 Trisura and Nib Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trisura Group and nib holdings limited, you can compare the effects of market volatilities on Trisura and Nib Holdings 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 Trisura with a short position of Nib Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trisura and Nib Holdings.
Diversification Opportunities for Trisura and Nib Holdings
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Trisura and Nib is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Trisura Group and nib holdings limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on nib holdings limited and Trisura 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 Trisura Group are associated (or correlated) with Nib Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of nib holdings limited has no effect on the direction of Trisura i.e., Trisura and Nib Holdings go up and down completely randomly.
Pair Corralation between Trisura and Nib Holdings
Assuming the 90 days trading horizon Trisura Group is expected to generate 0.83 times more return on investment than Nib Holdings. However, Trisura Group is 1.2 times less risky than Nib Holdings. It trades about -0.09 of its potential returns per unit of risk. nib holdings limited is currently generating about -0.16 per unit of risk. If you would invest 2,720 in Trisura Group on September 13, 2024 and sell it today you would lose (80.00) from holding Trisura Group or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trisura Group vs. nib holdings limited
Performance |
| Timeline |
| Trisura Group |
| nib holdings limited |
Trisura and Nib Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trisura and Nib Holdings
The main advantage of trading using opposite Trisura and Nib Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trisura position performs unexpectedly, Nib Holdings 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 Nib Holdings will offset losses from the drop in Nib Holdings' long position.| Trisura vs. Merit Medical Systems | Trisura vs. Japan Medical Dynamic | Trisura vs. Ameriprise Financial | Trisura vs. VIRG NATL BANKSH |
| Nib Holdings vs. BORR DRILLING NEW | Nib Holdings vs. Pembina Pipeline Corp | Nib Holdings vs. Tri Pointe Homes | Nib Holdings vs. CompuGroup Medical SE |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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