Correlation Between Nib Holdings and Assured Guaranty

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

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

Diversification Opportunities for Nib Holdings and Assured Guaranty

0.03

Correlation Coefficient

Nib Holdings  Assured Guaranty

Significant diversification

The 3 months correlation between Nib and Assured is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding nib holdings limited and Assured Guaranty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assured Guaranty and Nib 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 nib holdings limited are associated (or correlated) with Assured Guaranty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assured Guaranty has no effect on the direction of Nib Holdings i.e., Nib Holdings and Assured Guaranty go up and down completely randomly.

Pair Corralation between Nib Holdings and Assured Guaranty

Assuming the 90 days horizon nib holdings limited is expected to generate 1.46 times more return on investment than Assured Guaranty. However, Nib Holdings is 1.46 times more volatile than Assured Guaranty. It trades about 0.06 of its potential returns per unit of risk. Assured Guaranty is currently generating about -0.04 per unit of risk. If you would invest  356.00  in nib holdings limited on April 22, 2025 and sell it today you would earn a total of  32.00  from holding nib holdings limited or generate 8.99% return on investment over 90 days.

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

nib holdings limited  vs.  Assured Guaranty

nib holdings limited

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in nib holdings limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Nib Holdings may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Assured Guaranty

Risk-Adjusted Performance

Very Weak

Over the last 90 days Assured Guaranty has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Assured Guaranty is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Nib Holdings and Assured Guaranty

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

The idea behind nib holdings limited and Assured Guaranty 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.