Correlation Between Neinor Homes and Nib Holdings

Can any of the company-specific risk be diversified away by investing in both Neinor Homes 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 Neinor Homes and Nib Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Neinor Homes SA and nib holdings limited, you can compare the effects of market volatilities on Neinor Homes 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 Neinor Homes with a short position of Nib Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neinor Homes and Nib Holdings.

Diversification Opportunities for Neinor Homes and Nib Holdings

-0.27

Correlation Coefficient

Neinor Homes  Nib Holdings

Very good diversification

The 3 months correlation between Neinor and Nib is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Neinor Homes SA 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 Neinor Homes 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 Neinor Homes SA 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 Neinor Homes i.e., Neinor Homes and Nib Holdings go up and down completely randomly.

Pair Corralation between Neinor Homes and Nib Holdings

Assuming the 90 days trading horizon Neinor Homes SA is expected to under-perform the Nib Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Neinor Homes SA is 1.37 times less risky than Nib Holdings. The stock trades about -0.02 of its potential returns per unit of risk. The nib holdings limited is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  267.00  in nib holdings limited on December 19, 2024 and sell it today you would earn a total of  95.00  from holding nib holdings limited or generate 35.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Neinor Homes SA  vs.  nib holdings limited

Neinor Homes SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Neinor Homes SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Neinor Homes is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

nib holdings limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in nib holdings limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Nib Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Neinor Homes and Nib Holdings

The main advantage of trading using opposite Neinor Homes and Nib Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neinor Homes 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.

The idea behind Neinor Homes SA and nib holdings limited 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.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.