Correlation Between NMI Holdings and Impinj
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Impinj 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 Impinj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Impinj Inc, you can compare the effects of market volatilities on NMI Holdings and Impinj 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 Impinj. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Impinj.
Diversification Opportunities for NMI Holdings and Impinj
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NMI and Impinj is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Impinj Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impinj 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 Impinj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impinj Inc has no effect on the direction of NMI Holdings i.e., NMI Holdings and Impinj go up and down completely randomly.
Pair Corralation between NMI Holdings and Impinj
Assuming the 90 days horizon NMI Holdings is expected to generate 0.47 times more return on investment than Impinj. However, NMI Holdings is 2.11 times less risky than Impinj. It trades about -0.18 of its potential returns per unit of risk. Impinj Inc is currently generating about -0.14 per unit of risk. If you would invest 3,640 in NMI Holdings on October 13, 2024 and sell it today you would lose (180.00) from holding NMI Holdings or give up 4.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. Impinj Inc
Performance |
| Timeline |
| NMI Holdings |
| Impinj Inc |
NMI Holdings and Impinj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Impinj
The main advantage of trading using opposite NMI Holdings and Impinj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Impinj 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 Impinj will offset losses from the drop in Impinj's long position.| NMI Holdings vs. REVO INSURANCE SPA | NMI Holdings vs. Quaker Chemical | NMI Holdings vs. Cincinnati Financial Corp | NMI Holdings vs. Erste Group Bank |
| Impinj vs. Hon Hai Precision | Impinj vs. Sunny Optical Technology | Impinj vs. Superior Plus Corp | Impinj vs. NMI Holdings |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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