Correlation Between Trupanion and Nelnet

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

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

Diversification Opportunities for Trupanion and Nelnet

0.28

Correlation Coefficient

Trupanion  Nelnet

Modest diversification

The 3 months correlation between Trupanion and Nelnet is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Trupanion and Nelnet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nelnet Inc and Trupanion 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 Trupanion are associated (or correlated) with Nelnet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nelnet Inc has no effect on the direction of Trupanion i.e., Trupanion and Nelnet go up and down completely randomly.

Pair Corralation between Trupanion and Nelnet

Given the investment horizon of 90 days Trupanion is expected to generate 3.38 times less return on investment than Nelnet. In addition to that, Trupanion is 1.65 times more volatile than Nelnet Inc. It trades about 0.03 of its total potential returns per unit of risk. Nelnet Inc is currently generating about 0.19 per unit of volatility. If you would invest  10,531  in Nelnet Inc on May 6, 2025 and sell it today you would earn a total of  1,778  from holding Nelnet Inc or generate 16.88% return on investment over 90 days.

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

Trupanion  vs.  Nelnet Inc

Trupanion

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Trupanion are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Trupanion is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Nelnet Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nelnet Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Nelnet demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trupanion and Nelnet

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

The idea behind Trupanion and Nelnet Inc 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.