Correlation Between MQGAU and NI Holdings

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Can any of the company-specific risk be diversified away by investing in both MQGAU and NI 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 MQGAU and NI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MQGAU 4442 21 JUN 33 and NI Holdings, you can compare the effects of market volatilities on MQGAU and NI 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 MQGAU with a short position of NI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of MQGAU and NI Holdings.

Diversification Opportunities for MQGAU and NI Holdings

0.35
  Correlation Coefficient

Weak diversification

The 3 months correlation between MQGAU and NODK is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding MQGAU 4442 21 JUN 33 and NI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NI Holdings and MQGAU 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 MQGAU 4442 21 JUN 33 are associated (or correlated) with NI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NI Holdings has no effect on the direction of MQGAU i.e., MQGAU and NI Holdings go up and down completely randomly.

Pair Corralation between MQGAU and NI Holdings

Assuming the 90 days trading horizon MQGAU 4442 21 JUN 33 is expected to under-perform the NI Holdings. In addition to that, MQGAU is 1.09 times more volatile than NI Holdings. It trades about -0.27 of its total potential returns per unit of risk. NI Holdings is currently generating about 0.05 per unit of volatility. If you would invest  1,585  in NI Holdings on August 28, 2024 and sell it today you would earn a total of  18.00  from holding NI Holdings or generate 1.14% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy36.36%
ValuesDaily Returns

MQGAU 4442 21 JUN 33  vs.  NI Holdings

 Performance 
       Timeline  
MQGAU 4442 21 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days MQGAU 4442 21 JUN 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for MQGAU 4442 21 JUN 33 investors.
NI Holdings 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in NI Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, NI Holdings may actually be approaching a critical reversion point that can send shares even higher in December 2024.

MQGAU and NI Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MQGAU and NI Holdings

The main advantage of trading using opposite MQGAU and NI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MQGAU position performs unexpectedly, NI 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 NI Holdings will offset losses from the drop in NI Holdings' long position.
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The idea behind MQGAU 4442 21 JUN 33 and NI Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Transaction History module to view history of all your transactions and understand their impact on performance.

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