Correlation Between NMI Holdings and Fuyao Glass
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Fuyao Glass 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 Fuyao Glass into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Fuyao Glass Industry, you can compare the effects of market volatilities on NMI Holdings and Fuyao Glass 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 Fuyao Glass. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Fuyao Glass.
Diversification Opportunities for NMI Holdings and Fuyao Glass
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between NMI and Fuyao is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Fuyao Glass Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuyao Glass Industry 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 Fuyao Glass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuyao Glass Industry has no effect on the direction of NMI Holdings i.e., NMI Holdings and Fuyao Glass go up and down completely randomly.
Pair Corralation between NMI Holdings and Fuyao Glass
Assuming the 90 days horizon NMI Holdings is expected to generate 1.94 times more return on investment than Fuyao Glass. However, NMI Holdings is 1.94 times more volatile than Fuyao Glass Industry. It trades about 0.05 of its potential returns per unit of risk. Fuyao Glass Industry is currently generating about -0.09 per unit of risk. If you would invest 3,580 in NMI Holdings on August 27, 2024 and sell it today you would earn a total of 60.00 from holding NMI Holdings or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. Fuyao Glass Industry
Performance |
| Timeline |
| NMI Holdings |
| Fuyao Glass Industry |
NMI Holdings and Fuyao Glass Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Fuyao Glass
The main advantage of trading using opposite NMI Holdings and Fuyao Glass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Fuyao Glass 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 Fuyao Glass will offset losses from the drop in Fuyao Glass' long position.| NMI Holdings vs. Lion Biotechnologies | NMI Holdings vs. Digilife Technologies Limited | NMI Holdings vs. Food Life Companies | NMI Holdings vs. CONAGRA FOODS |
| Fuyao Glass vs. Superior Plus Corp | Fuyao Glass vs. NMI Holdings | Fuyao Glass vs. Origin Agritech | Fuyao Glass vs. SIVERS SEMICONDUCTORS AB |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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