Correlation Between NMI Holdings and PROQR THERAPEUTICS
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and PROQR THERAPEUTICS 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 NMI Holdings and PROQR THERAPEUTICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and PROQR THERAPEUTICS EO 04, you can compare the effects of market volatilities on NMI Holdings and PROQR THERAPEUTICS 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 NMI Holdings with a short position of PROQR THERAPEUTICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and PROQR THERAPEUTICS.
Diversification Opportunities for NMI Holdings and PROQR THERAPEUTICS
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NMI and PROQR is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and PROQR THERAPEUTICS EO 04 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PROQR THERAPEUTICS and NMI 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 NMI Holdings are associated (or correlated) with PROQR THERAPEUTICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PROQR THERAPEUTICS has no effect on the direction of NMI Holdings i.e., NMI Holdings and PROQR THERAPEUTICS go up and down completely randomly.
Pair Corralation between NMI Holdings and PROQR THERAPEUTICS
Assuming the 90 days horizon NMI Holdings is expected to generate 3.33 times less return on investment than PROQR THERAPEUTICS. But when comparing it to its historical volatility, NMI Holdings is 5.39 times less risky than PROQR THERAPEUTICS. It trades about 0.09 of its potential returns per unit of risk. PROQR THERAPEUTICS EO 04 is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 159.00 in PROQR THERAPEUTICS EO 04 on August 31, 2024 and sell it today you would earn a total of 182.00 from holding PROQR THERAPEUTICS EO 04 or generate 114.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. PROQR THERAPEUTICS EO 04
Performance |
| Timeline |
| NMI Holdings |
| PROQR THERAPEUTICS |
NMI Holdings and PROQR THERAPEUTICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and PROQR THERAPEUTICS
The main advantage of trading using opposite NMI Holdings and PROQR THERAPEUTICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, PROQR THERAPEUTICS 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 PROQR THERAPEUTICS will offset losses from the drop in PROQR THERAPEUTICS's long position.| NMI Holdings vs. Iridium Communications | NMI Holdings vs. BOS BETTER ONLINE | NMI Holdings vs. Verizon Communications | NMI Holdings vs. Singapore Telecommunications Limited |
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Check out your portfolio center.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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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