Correlation Between W R and NI Holdings

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

By analyzing existing cross correlation between W R Berkley and NI Holdings, you can compare the effects of market volatilities on W R 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 W R with a short position of NI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of W R and NI Holdings.

Diversification Opportunities for W R and NI Holdings

-0.71

Correlation Coefficient

W R  NI Holdings

Pay attention - limited upside

The 3 months correlation between WRB and NODK is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding W R Berkley and NI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NI Holdings and W R 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 W R Berkley 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 W R i.e., W R and NI Holdings go up and down completely randomly.

Pair Corralation between W R and NI Holdings

Considering the 90-day investment horizon W R Berkley is expected to generate 0.84 times more return on investment than NI Holdings. However, W R Berkley is 1.19 times less risky than NI Holdings. It trades about 0.12 of its potential returns per unit of risk. NI Holdings is currently generating about -0.1 per unit of risk. If you would invest  5,914  in W R Berkley on December 26, 2024 and sell it today you would earn a total of  528.00  from holding W R Berkley or generate 8.93% return on investment over 90 days.

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

W R Berkley  vs.  NI Holdings

W R Berkley

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in W R Berkley are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, W R may actually be approaching a critical reversion point that can send shares even higher in April 2025.

NI Holdings

Risk-Adjusted Performance

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.

Pair Trading with W R and NI Holdings

The main advantage of trading using opposite W R and NI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if W R 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 W R Berkley 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .