Correlation Between NMI Holdings and ViacomCBS
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and ViacomCBS 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 ViacomCBS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and ViacomCBS, you can compare the effects of market volatilities on NMI Holdings and ViacomCBS 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 ViacomCBS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and ViacomCBS.
Diversification Opportunities for NMI Holdings and ViacomCBS
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NMI and ViacomCBS is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and ViacomCBS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ViacomCBS 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 ViacomCBS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ViacomCBS has no effect on the direction of NMI Holdings i.e., NMI Holdings and ViacomCBS go up and down completely randomly.
Pair Corralation between NMI Holdings and ViacomCBS
Assuming the 90 days horizon NMI Holdings is expected to generate 1.31 times less return on investment than ViacomCBS. In addition to that, NMI Holdings is 1.14 times more volatile than ViacomCBS. It trades about 0.13 of its total potential returns per unit of risk. ViacomCBS is currently generating about 0.19 per unit of volatility. If you would invest 1,986 in ViacomCBS on August 31, 2024 and sell it today you would earn a total of 169.00 from holding ViacomCBS or generate 8.51% 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. ViacomCBS
Performance |
| Timeline |
| NMI Holdings |
| ViacomCBS |
NMI Holdings and ViacomCBS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and ViacomCBS
The main advantage of trading using opposite NMI Holdings and ViacomCBS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, ViacomCBS 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 ViacomCBS will offset losses from the drop in ViacomCBS'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 |
| ViacomCBS vs. Netflix | ViacomCBS vs. Warner Music Group | ViacomCBS vs. ViacomCBS | ViacomCBS vs. Superior Plus Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |