Correlation Between NMI Holdings and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Sabre Insurance 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 Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Sabre Insurance Group, you can compare the effects of market volatilities on NMI Holdings and Sabre Insurance 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 Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Sabre Insurance.
Diversification Opportunities for NMI Holdings and Sabre Insurance
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NMI and Sabre is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Sabre Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabre Insurance Group 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 Sabre Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabre Insurance Group has no effect on the direction of NMI Holdings i.e., NMI Holdings and Sabre Insurance go up and down completely randomly.
Pair Corralation between NMI Holdings and Sabre Insurance
Assuming the 90 days horizon NMI Holdings is expected to generate 0.67 times more return on investment than Sabre Insurance. However, NMI Holdings is 1.48 times less risky than Sabre Insurance. It trades about 0.1 of its potential returns per unit of risk. Sabre Insurance Group is currently generating about 0.02 per unit of risk. If you would invest 2,080 in NMI Holdings on August 27, 2024 and sell it today you would earn a total of 1,560 from holding NMI Holdings or generate 75.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. Sabre Insurance Group
Performance |
| Timeline |
| NMI Holdings |
| Sabre Insurance Group |
NMI Holdings and Sabre Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Sabre Insurance
The main advantage of trading using opposite NMI Holdings and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Sabre Insurance 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 Sabre Insurance will offset losses from the drop in Sabre Insurance's long position.| NMI Holdings vs. Aedas Homes SA | NMI Holdings vs. MTI WIRELESS EDGE | NMI Holdings vs. Spirent Communications plc | NMI Holdings vs. Citic Telecom International |
| Sabre Insurance vs. Superior Plus Corp | Sabre Insurance vs. NMI Holdings | Sabre Insurance vs. Origin Agritech | Sabre Insurance vs. SIVERS SEMICONDUCTORS AB |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |