Correlation Between 209111GE7 and NI Holdings

Can any of the company-specific risk be diversified away by investing in both 209111GE7 and NI 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 209111GE7 and NI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ED 52 01 MAR 33 and NI Holdings, you can compare the effects of market volatilities on 209111GE7 and NI 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 209111GE7 with a short position of NI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of 209111GE7 and NI Holdings.

Diversification Opportunities for 209111GE7 and NI Holdings

-0.54

Correlation Coefficient

209111GE7  NI Holdings

Excellent diversification

The 3 months correlation between 209111GE7 and NODK is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding ED 52 01 MAR 33 and NI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NI Holdings and 209111GE7 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 ED 52 01 MAR 33 are associated (or correlated) with NI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NI Holdings has no effect on the direction of 209111GE7 i.e., 209111GE7 and NI Holdings go up and down completely randomly.

Pair Corralation between 209111GE7 and NI Holdings

Assuming the 90 days trading horizon ED 52 01 MAR 33 is expected to under-perform the NI Holdings. But the bond apears to be less risky and, when comparing its historical volatility, ED 52 01 MAR 33 is 1.61 times less risky than NI Holdings. The bond trades about -0.08 of its potential returns per unit of risk. The NI Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,515  in NI Holdings on September 16, 2024 and sell it today you would earn a total of  153.00  from holding NI Holdings or generate 10.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.77%
Values	Daily Returns

ED 52 01 MAR 33  vs.  NI Holdings

209111GE7

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ED 52 01 MAR 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 209111GE7 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

NI Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NI Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, NI Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with 209111GE7 and NI Holdings

The main advantage of trading using opposite 209111GE7 and NI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 209111GE7 position performs unexpectedly, NI 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 NI Holdings will offset losses from the drop in NI Holdings' long position.

The idea behind ED 52 01 MAR 33 and NI Holdings 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.