Correlation Between NMI Holdings and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Hollywood Bowl 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 Hollywood Bowl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Hollywood Bowl Group, you can compare the effects of market volatilities on NMI Holdings and Hollywood Bowl 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 Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Hollywood Bowl.
Diversification Opportunities for NMI Holdings and Hollywood Bowl
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NMI and Hollywood is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Hollywood Bowl Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollywood Bowl Group 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 Hollywood Bowl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollywood Bowl Group has no effect on the direction of NMI Holdings i.e., NMI Holdings and Hollywood Bowl go up and down completely randomly.
Pair Corralation between NMI Holdings and Hollywood Bowl
Assuming the 90 days horizon NMI Holdings is expected to generate 0.83 times more return on investment than Hollywood Bowl. However, NMI Holdings is 1.2 times less risky than Hollywood Bowl. It trades about 0.06 of its potential returns per unit of risk. Hollywood Bowl Group is currently generating about 0.04 per unit of risk. If you would invest 2,240 in NMI Holdings on November 27, 2024 and sell it today you would earn a total of 1,080 from holding NMI Holdings or generate 48.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. Hollywood Bowl Group
Performance |
| Timeline |
| NMI Holdings |
| Hollywood Bowl Group |
NMI Holdings and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Hollywood Bowl
The main advantage of trading using opposite NMI Holdings and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Hollywood Bowl 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 Hollywood Bowl will offset losses from the drop in Hollywood Bowl's long position.| NMI Holdings vs. China Southern Airlines | NMI Holdings vs. Gol Intelligent Airlines | NMI Holdings vs. International Consolidated Airlines | NMI Holdings vs. CARSALESCOM |
| Hollywood Bowl vs. SANOK RUBBER ZY | Hollywood Bowl vs. Compagnie Plastic Omnium | Hollywood Bowl vs. Eagle Materials | Hollywood Bowl vs. GOME Retail 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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