Correlation Between NICK Old and Consumer Portfolio

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

By analyzing existing cross correlation between NICK Old and Consumer Portfolio Services, you can compare the effects of market volatilities on NICK Old and Consumer Portfolio 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 NICK Old with a short position of Consumer Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of NICK Old and Consumer Portfolio.

Diversification Opportunities for NICK Old and Consumer Portfolio

0.0

Correlation Coefficient

NICK Old  Consumer Portfolio

Pay attention - limited upside

The 3 months correlation between NICK and Consumer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NICK Old and Consumer Portfolio Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consumer Portfolio and NICK Old 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 NICK Old are associated (or correlated) with Consumer Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consumer Portfolio has no effect on the direction of NICK Old i.e., NICK Old and Consumer Portfolio go up and down completely randomly.

Pair Corralation between NICK Old and Consumer Portfolio

If you would invest (100.00) in NICK Old on November 29, 2024 and sell it today you would earn a total of  100.00  from holding NICK Old or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

NICK Old  vs.  Consumer Portfolio Services

NICK Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days NICK Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, NICK Old is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Consumer Portfolio

Risk-Adjusted Performance

Very Weak

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

Pair Trading with NICK Old and Consumer Portfolio

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

The idea behind NICK Old and Consumer Portfolio Services 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.