Correlation Between NI Holdings and 12513GBE8

Can any of the company-specific risk be diversified away by investing in both NI Holdings and 12513GBE8 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 12513GBE8 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NI Holdings and CDW LLC 4125, you can compare the effects of market volatilities on NI Holdings and 12513GBE8 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 12513GBE8. Check out your portfolio center. Please also check ongoing floating volatility patterns of NI Holdings and 12513GBE8.

Diversification Opportunities for NI Holdings and 12513GBE8

0.04

Correlation Coefficient

NI Holdings  12513GBE8

Significant diversification

The 3 months correlation between NODK and 12513GBE8 is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding NI Holdings and CDW LLC 4125 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDW LLC 4125 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 12513GBE8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDW LLC 4125 has no effect on the direction of NI Holdings i.e., NI Holdings and 12513GBE8 go up and down completely randomly.

Pair Corralation between NI Holdings and 12513GBE8

Given the investment horizon of 90 days NI Holdings is expected to under-perform the 12513GBE8. In addition to that, NI Holdings is 2.93 times more volatile than CDW LLC 4125. It trades about -0.08 of its total potential returns per unit of risk. CDW LLC 4125 is currently generating about -0.11 per unit of volatility. If you would invest  9,958  in CDW LLC 4125 on October 24, 2024 and sell it today you would lose (255.00) from holding CDW LLC 4125 or give up 2.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	76.67%
Values	Daily Returns

NI Holdings  vs.  CDW LLC 4125

NI Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NI Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

CDW LLC 4125

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CDW LLC 4125 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 12513GBE8 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with NI Holdings and 12513GBE8

The main advantage of trading using opposite NI Holdings and 12513GBE8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NI Holdings position performs unexpectedly, 12513GBE8 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 12513GBE8 will offset losses from the drop in 12513GBE8's long position.

The idea behind NI Holdings and CDW LLC 4125 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..