Correlation Between NMI Holdings and ID Logistics
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and ID Logistics 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 ID Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and ID Logistics SAS, you can compare the effects of market volatilities on NMI Holdings and ID Logistics 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 ID Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and ID Logistics.
Diversification Opportunities for NMI Holdings and ID Logistics
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between NMI and 1ID is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and ID Logistics SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ID Logistics SAS 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 ID Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ID Logistics SAS has no effect on the direction of NMI Holdings i.e., NMI Holdings and ID Logistics go up and down completely randomly.
Pair Corralation between NMI Holdings and ID Logistics
Assuming the 90 days horizon NMI Holdings is expected to under-perform the ID Logistics. In addition to that, NMI Holdings is 1.05 times more volatile than ID Logistics SAS. It trades about -0.08 of its total potential returns per unit of risk. ID Logistics SAS is currently generating about 0.07 per unit of volatility. If you would invest 38,200 in ID Logistics SAS on October 28, 2024 and sell it today you would earn a total of 1,450 from holding ID Logistics SAS or generate 3.8% 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. ID Logistics SAS
Performance |
| Timeline |
| NMI Holdings |
| ID Logistics SAS |
NMI Holdings and ID Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and ID Logistics
The main advantage of trading using opposite NMI Holdings and ID Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, ID Logistics 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 ID Logistics will offset losses from the drop in ID Logistics' long position.| NMI Holdings vs. Gruppo Mutuionline SpA | NMI Holdings vs. Aristocrat Leisure Limited | NMI Holdings vs. GungHo Online Entertainment | NMI Holdings vs. PLAYMATES TOYS |
| ID Logistics vs. Automatic Data Processing | ID Logistics vs. Fiserv Inc | ID Logistics vs. Paychex | ID Logistics vs. Fidelity National Information |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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