Correlation Between US Physical and Nib Holdings

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

By analyzing existing cross correlation between US Physical Therapy and nib holdings limited, you can compare the effects of market volatilities on US Physical and Nib Holdings 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 US Physical with a short position of Nib Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Physical and Nib Holdings.

Diversification Opportunities for US Physical and Nib Holdings

-0.75

Correlation Coefficient

US Physical  Nib Holdings

Pay attention - limited upside

The 3 months correlation between UPH and Nib is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding US Physical Therapy and nib holdings limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on nib holdings limited and US Physical 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 US Physical Therapy are associated (or correlated) with Nib Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of nib holdings limited has no effect on the direction of US Physical i.e., US Physical and Nib Holdings go up and down completely randomly.

Pair Corralation between US Physical and Nib Holdings

Assuming the 90 days horizon US Physical Therapy is expected to under-perform the Nib Holdings. But the stock apears to be less risky and, when comparing its historical volatility, US Physical Therapy is 2.02 times less risky than Nib Holdings. The stock trades about -0.22 of its potential returns per unit of risk. The nib holdings limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  324.00  in nib holdings limited on December 17, 2024 and sell it today you would earn a total of  40.00  from holding nib holdings limited or generate 12.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

US Physical Therapy  vs.  nib holdings limited

US Physical Therapy

Risk-Adjusted Performance

Very Weak

Over the last 90 days US Physical Therapy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

nib holdings limited

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in nib holdings limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Nib Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with US Physical and Nib Holdings

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

The idea behind US Physical Therapy and nib holdings limited 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.