Correlation Between NMI Holdings and Trane Technologies
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Trane Technologies 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 Trane Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Trane Technologies plc, you can compare the effects of market volatilities on NMI Holdings and Trane Technologies 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 Trane Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Trane Technologies.
Diversification Opportunities for NMI Holdings and Trane Technologies
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NMI and Trane is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Trane Technologies plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trane Technologies plc 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 Trane Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trane Technologies plc has no effect on the direction of NMI Holdings i.e., NMI Holdings and Trane Technologies go up and down completely randomly.
Pair Corralation between NMI Holdings and Trane Technologies
If you would invest 0.00 in NMI Holdings on January 9, 2025 and sell it today you would earn a total of 0.00 from holding NMI Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
NMI Holdings vs. Trane Technologies plc
Performance |
| Timeline |
| NMI Holdings |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Trane Technologies plc |
NMI Holdings and Trane Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Trane Technologies
The main advantage of trading using opposite NMI Holdings and Trane Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Trane Technologies 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 Trane Technologies will offset losses from the drop in Trane Technologies' long position.| NMI Holdings vs. INTERSHOP Communications Aktiengesellschaft | NMI Holdings vs. T MOBILE US | NMI Holdings vs. TYSON FOODS A | NMI Holdings vs. High Liner Foods |
| Trane Technologies vs. Honeywell International | Trane Technologies vs. Illinois Tool Works | Trane Technologies vs. ABB | Trane Technologies vs. 3M Company |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |