Correlation Between NICK Old and World Acceptance

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

By analyzing existing cross correlation between NICK Old and World Acceptance, you can compare the effects of market volatilities on NICK Old and World Acceptance 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 World Acceptance. Check out your portfolio center. Please also check ongoing floating volatility patterns of NICK Old and World Acceptance.

Diversification Opportunities for NICK Old and World Acceptance

0.0

Correlation Coefficient

NICK Old  World Acceptance

Pay attention - limited upside

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

Pair Corralation between NICK Old and World Acceptance

If you would invest  11,188  in World Acceptance on December 29, 2024 and sell it today you would earn a total of  2,012  from holding World Acceptance or generate 17.98% return on investment over 90 days.

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

NICK Old  vs.  World Acceptance

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.

World Acceptance

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in World Acceptance are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal essential indicators, World Acceptance exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NICK Old and World Acceptance

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

The idea behind NICK Old and World Acceptance 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.