Correlation Between NMI Holdings and Visa
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By analyzing existing cross correlation between NMI Holdings and Visa Inc, you can compare the effects of market volatilities on NMI Holdings and Visa 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 Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Visa.
Diversification Opportunities for NMI Holdings and Visa
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NMI and Visa is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Visa Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa 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 Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Inc has no effect on the direction of NMI Holdings i.e., NMI Holdings and Visa go up and down completely randomly.
Pair Corralation between NMI Holdings and Visa
Assuming the 90 days horizon NMI Holdings is expected to under-perform the Visa. In addition to that, NMI Holdings is 2.19 times more volatile than Visa Inc. It trades about -0.14 of its total potential returns per unit of risk. Visa Inc is currently generating about 0.04 per unit of volatility. If you would invest 29,965 in Visa Inc on October 12, 2024 and sell it today you would earn a total of 135.00 from holding Visa Inc or generate 0.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
NMI Holdings vs. Visa Inc
Performance |
| Timeline |
| NMI Holdings |
| Visa Inc |
NMI Holdings and Visa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Visa
The main advantage of trading using opposite NMI Holdings and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Visa 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 Visa will offset losses from the drop in Visa's long position.| NMI Holdings vs. ZhongAn Online P | NMI Holdings vs. Singapore Airlines Limited | NMI Holdings vs. PRECISION DRILLING P | NMI Holdings vs. CARSALESCOM |
| Visa vs. GOLD ROAD RES | Visa vs. GMO Internet | Visa vs. Yuexiu Transport Infrastructure | Visa vs. Liberty Broadband |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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