Correlation Between NMI Holdings and 2G ENERGY
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and 2G ENERGY 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 2G ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and 2G ENERGY , you can compare the effects of market volatilities on NMI Holdings and 2G ENERGY 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 2G ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and 2G ENERGY.
Diversification Opportunities for NMI Holdings and 2G ENERGY
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NMI and 2GB is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and 2G ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 2G ENERGY 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 2G ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 2G ENERGY has no effect on the direction of NMI Holdings i.e., NMI Holdings and 2G ENERGY go up and down completely randomly.
Pair Corralation between NMI Holdings and 2G ENERGY
Assuming the 90 days horizon NMI Holdings is expected to generate 0.79 times more return on investment than 2G ENERGY. However, NMI Holdings is 1.27 times less risky than 2G ENERGY. It trades about 0.07 of its potential returns per unit of risk. 2G ENERGY is currently generating about -0.06 per unit of risk. If you would invest 3,580 in NMI Holdings on August 29, 2024 and sell it today you would earn a total of 100.00 from holding NMI Holdings or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
NMI Holdings vs. 2G ENERGY
Performance |
| Timeline |
| NMI Holdings |
| 2G ENERGY |
NMI Holdings and 2G ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and 2G ENERGY
The main advantage of trading using opposite NMI Holdings and 2G ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, 2G ENERGY 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 2G ENERGY will offset losses from the drop in 2G ENERGY's long position.| NMI Holdings vs. Boyd Gaming | NMI Holdings vs. SEI INVESTMENTS | NMI Holdings vs. HK Electric Investments | NMI Holdings vs. WisdomTree Investments |
| 2G ENERGY vs. FISH PAYK HEALTH | 2G ENERGY vs. GREENX METALS LTD | 2G ENERGY vs. Lion One Metals | 2G ENERGY vs. Zijin Mining Group |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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