Correlation Between Nib Holdings and Trupanion

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

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

Diversification Opportunities for Nib Holdings and Trupanion

-0.82

Correlation Coefficient

Nib Holdings  Trupanion

Pay attention - limited upside

The 3 months correlation between Nib and Trupanion is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding nib holdings limited and Trupanion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trupanion and Nib 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 nib holdings limited are associated (or correlated) with Trupanion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trupanion has no effect on the direction of Nib Holdings i.e., Nib Holdings and Trupanion go up and down completely randomly.

Pair Corralation between Nib Holdings and Trupanion

Assuming the 90 days horizon nib holdings limited is expected to generate 0.73 times more return on investment than Trupanion. However, nib holdings limited is 1.38 times less risky than Trupanion. It trades about 0.15 of its potential returns per unit of risk. Trupanion is currently generating about -0.15 per unit of risk. If you would invest  293.00  in nib holdings limited on December 20, 2024 and sell it today you would earn a total of  69.00  from holding nib holdings limited or generate 23.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

nib holdings limited  vs.  Trupanion

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 11 (%) 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.

Trupanion

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trupanion has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Nib Holdings and Trupanion

The main advantage of trading using opposite Nib Holdings and Trupanion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nib Holdings position performs unexpectedly, Trupanion 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 Trupanion will offset losses from the drop in Trupanion's long position.

The idea behind nib holdings limited and Trupanion 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.