Correlation Between National Reinsurance and Nickel Asia

Can any of the company-specific risk be diversified away by investing in both National Reinsurance and Nickel Asia 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 National Reinsurance and Nickel Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between National Reinsurance and Nickel Asia Corp, you can compare the effects of market volatilities on National Reinsurance and Nickel Asia 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 National Reinsurance with a short position of Nickel Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Reinsurance and Nickel Asia.

Diversification Opportunities for National Reinsurance and Nickel Asia

0.64

Correlation Coefficient

National Reinsurance  Nickel Asia

Poor diversification

The 3 months correlation between National and Nickel is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding National Reinsurance and Nickel Asia Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nickel Asia Corp and National Reinsurance 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 National Reinsurance are associated (or correlated) with Nickel Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nickel Asia Corp has no effect on the direction of National Reinsurance i.e., National Reinsurance and Nickel Asia go up and down completely randomly.

Pair Corralation between National Reinsurance and Nickel Asia

Assuming the 90 days trading horizon National Reinsurance is expected to under-perform the Nickel Asia. In addition to that, National Reinsurance is 1.98 times more volatile than Nickel Asia Corp. It trades about -0.02 of its total potential returns per unit of risk. Nickel Asia Corp is currently generating about -0.01 per unit of volatility. If you would invest  321.00  in Nickel Asia Corp on September 14, 2024 and sell it today you would lose (9.00) from holding Nickel Asia Corp or give up 2.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.88%
Values	Daily Returns

National Reinsurance  vs.  Nickel Asia Corp

National Reinsurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Reinsurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Nickel Asia Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nickel Asia Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Nickel Asia is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with National Reinsurance and Nickel Asia

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

The idea behind National Reinsurance and Nickel Asia Corp 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..