Correlation Between ALERION CLEANPOWER and Nib Holdings

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

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

Diversification Opportunities for ALERION CLEANPOWER and Nib Holdings

0.41

Correlation Coefficient

ALERION CLEANPOWER  Nib Holdings

Very weak diversification

The 3 months correlation between ALERION and Nib is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding ALERION CLEANPOWER 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 ALERION CLEANPOWER 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 ALERION CLEANPOWER 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 ALERION CLEANPOWER i.e., ALERION CLEANPOWER and Nib Holdings go up and down completely randomly.

Pair Corralation between ALERION CLEANPOWER and Nib Holdings

Assuming the 90 days trading horizon ALERION CLEANPOWER is expected to generate 1.23 times more return on investment than Nib Holdings. However, ALERION CLEANPOWER is 1.23 times more volatile than nib holdings limited. It trades about 0.2 of its potential returns per unit of risk. nib holdings limited is currently generating about 0.04 per unit of risk. If you would invest  1,402  in ALERION CLEANPOWER on April 24, 2025 and sell it today you would earn a total of  738.00  from holding ALERION CLEANPOWER or generate 52.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

ALERION CLEANPOWER  vs.  nib holdings limited

ALERION CLEANPOWER

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ALERION CLEANPOWER are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ALERION CLEANPOWER reported solid returns over the last few months and may actually be approaching a breakup point.

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 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Nib Holdings may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with ALERION CLEANPOWER and Nib Holdings

The main advantage of trading using opposite ALERION CLEANPOWER and Nib Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALERION CLEANPOWER 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 ALERION CLEANPOWER 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.