Correlation Between NMI Holdings and National Beverage
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and National Beverage 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 National Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and National Beverage Corp, you can compare the effects of market volatilities on NMI Holdings and National Beverage 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 National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and National Beverage.
Diversification Opportunities for NMI Holdings and National Beverage
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NMI and National is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage Corp 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 National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of NMI Holdings i.e., NMI Holdings and National Beverage go up and down completely randomly.
Pair Corralation between NMI Holdings and National Beverage
Assuming the 90 days horizon NMI Holdings is expected to generate 0.81 times more return on investment than National Beverage. However, NMI Holdings is 1.24 times less risky than National Beverage. It trades about 0.09 of its potential returns per unit of risk. National Beverage Corp is currently generating about 0.01 per unit of risk. If you would invest 1,860 in NMI Holdings on August 28, 2024 and sell it today you would earn a total of 1,780 from holding NMI Holdings or generate 95.7% 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. National Beverage Corp
Performance |
| Timeline |
| NMI Holdings |
| National Beverage Corp |
NMI Holdings and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and National Beverage
The main advantage of trading using opposite NMI Holdings and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, National Beverage 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 National Beverage will offset losses from the drop in National Beverage's long position.| NMI Holdings vs. Lion Biotechnologies | NMI Holdings vs. Digilife Technologies Limited | NMI Holdings vs. Food Life Companies | NMI Holdings vs. CONAGRA FOODS |
| National Beverage vs. FIREWEED METALS P | National Beverage vs. Kaiser Aluminum | National Beverage vs. PennyMac Mortgage Investment | National Beverage vs. Chuangs China Investments |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| 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 | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |