Correlation Between NMI Holdings and J JILL
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and J JILL 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 J JILL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and J JILL INC, you can compare the effects of market volatilities on NMI Holdings and J JILL 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 J JILL. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and J JILL.
Diversification Opportunities for NMI Holdings and J JILL
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NMI and 1MJ1 is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and J JILL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J JILL INC 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 J JILL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J JILL INC has no effect on the direction of NMI Holdings i.e., NMI Holdings and J JILL go up and down completely randomly.
Pair Corralation between NMI Holdings and J JILL
Assuming the 90 days horizon NMI Holdings is expected to under-perform the J JILL. But the stock apears to be less risky and, when comparing its historical volatility, NMI Holdings is 1.14 times less risky than J JILL. The stock trades about -0.04 of its potential returns per unit of risk. The J JILL INC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,220 in J JILL INC on August 24, 2024 and sell it today you would earn a total of 80.00 from holding J JILL INC or generate 3.6% 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. J JILL INC
Performance |
| Timeline |
| NMI Holdings |
| J JILL INC |
NMI Holdings and J JILL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and J JILL
The main advantage of trading using opposite NMI Holdings and J JILL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, J JILL 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 J JILL will offset losses from the drop in J JILL's long position.| NMI Holdings vs. Lion One Metals | NMI Holdings vs. Harmony Gold Mining | NMI Holdings vs. OFFICE DEPOT | NMI Holdings vs. JAPAN TOBACCO UNSPADR12 |
| J JILL vs. ADRIATIC METALS LS 013355 | J JILL vs. Warner Music Group | J JILL vs. LION ONE METALS | J JILL vs. Tencent Music Entertainment |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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