Correlation Between NI Holdings and MYT Netherlands
Can any of the company-specific risk be diversified away by investing in both NI Holdings and MYT Netherlands 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 NI Holdings and MYT Netherlands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NI Holdings and MYT Netherlands Parent, you can compare the effects of market volatilities on NI Holdings and MYT Netherlands 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 NI Holdings with a short position of MYT Netherlands. Check out your portfolio center. Please also check ongoing floating volatility patterns of NI Holdings and MYT Netherlands.
Diversification Opportunities for NI Holdings and MYT Netherlands
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NODK and MYT is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding NI Holdings and MYT Netherlands Parent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYT Netherlands Parent and NI 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 NI Holdings are associated (or correlated) with MYT Netherlands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYT Netherlands Parent has no effect on the direction of NI Holdings i.e., NI Holdings and MYT Netherlands go up and down completely randomly.
Pair Corralation between NI Holdings and MYT Netherlands
Given the investment horizon of 90 days NI Holdings is expected to under-perform the MYT Netherlands. But the stock apears to be less risky and, when comparing its historical volatility, NI Holdings is 2.96 times less risky than MYT Netherlands. The stock trades about -0.15 of its potential returns per unit of risk. The MYT Netherlands Parent is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 763.00 in MYT Netherlands Parent on December 17, 2024 and sell it today you would earn a total of 115.00 from holding MYT Netherlands Parent or generate 15.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
NI Holdings vs. MYT Netherlands Parent
Performance |
Timeline |
NI Holdings |
MYT Netherlands Parent |
NI Holdings and MYT Netherlands Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NI Holdings and MYT Netherlands
The main advantage of trading using opposite NI Holdings and MYT Netherlands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NI Holdings position performs unexpectedly, MYT Netherlands 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 MYT Netherlands will offset losses from the drop in MYT Netherlands' long position.NI Holdings vs. Horace Mann Educators | NI Holdings vs. Donegal Group A | NI Holdings vs. Global Indemnity PLC | NI Holdings vs. Selective Insurance Group |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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