Correlation Between Nimir Industrial and Security Investment

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

By analyzing existing cross correlation between Nimir Industrial Chemical and Security Investment Bank, you can compare the effects of market volatilities on Nimir Industrial and Security Investment 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 Nimir Industrial with a short position of Security Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nimir Industrial and Security Investment.

Diversification Opportunities for Nimir Industrial and Security Investment

0.27

Correlation Coefficient

Nimir Industrial  Security Investment

Modest diversification

The 3 months correlation between Nimir and Security is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Nimir Industrial Chemical and Security Investment Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security Investment Bank and Nimir Industrial 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 Nimir Industrial Chemical are associated (or correlated) with Security Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security Investment Bank has no effect on the direction of Nimir Industrial i.e., Nimir Industrial and Security Investment go up and down completely randomly.

Pair Corralation between Nimir Industrial and Security Investment

Assuming the 90 days trading horizon Nimir Industrial is expected to generate 4.46 times less return on investment than Security Investment. But when comparing it to its historical volatility, Nimir Industrial Chemical is 2.2 times less risky than Security Investment. It trades about 0.08 of its potential returns per unit of risk. Security Investment Bank is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  500.00  in Security Investment Bank on December 4, 2024 and sell it today you would earn a total of  294.00  from holding Security Investment Bank or generate 58.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Nimir Industrial Chemical  vs.  Security Investment Bank

Nimir Industrial Chemical

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nimir Industrial Chemical are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Nimir Industrial sustained solid returns over the last few months and may actually be approaching a breakup point.

Security Investment Bank

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Security Investment Bank are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Security Investment sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nimir Industrial and Security Investment

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

The idea behind Nimir Industrial Chemical and Security Investment Bank 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.