Correlation Between NMI Holdings and Haverty Furniture
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Haverty Furniture 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 Haverty Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Haverty Furniture Companies, you can compare the effects of market volatilities on NMI Holdings and Haverty Furniture 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 Haverty Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Haverty Furniture.
Diversification Opportunities for NMI Holdings and Haverty Furniture
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NMI and Haverty is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture 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 Haverty Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haverty Furniture has no effect on the direction of NMI Holdings i.e., NMI Holdings and Haverty Furniture go up and down completely randomly.
Pair Corralation between NMI Holdings and Haverty Furniture
Assuming the 90 days horizon NMI Holdings is expected to generate 2.1 times less return on investment than Haverty Furniture. But when comparing it to its historical volatility, NMI Holdings is 1.21 times less risky than Haverty Furniture. It trades about 0.11 of its potential returns per unit of risk. Haverty Furniture Companies is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,991 in Haverty Furniture Companies on September 1, 2024 and sell it today you would earn a total of 249.00 from holding Haverty Furniture Companies or generate 12.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. Haverty Furniture Companies
Performance |
| Timeline |
| NMI Holdings |
| Haverty Furniture |
NMI Holdings and Haverty Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Haverty Furniture
The main advantage of trading using opposite NMI Holdings and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Haverty Furniture 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 Haverty Furniture will offset losses from the drop in Haverty Furniture's long position.| NMI Holdings vs. KIMBALL ELECTRONICS | NMI Holdings vs. UET United Electronic | NMI Holdings vs. BYD ELECTRONIC | NMI Holdings vs. Benchmark Electronics |
| Haverty Furniture vs. Lowes Companies | Haverty Furniture vs. Byggmax Group AB | Haverty Furniture vs. Superior Plus Corp | Haverty Furniture vs. Origin Agritech |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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