Correlation Between NMI Holdings and Apollo Investment
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Apollo Investment 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 Apollo Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Apollo Investment Corp, you can compare the effects of market volatilities on NMI Holdings and Apollo Investment 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 Apollo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Apollo Investment.
Diversification Opportunities for NMI Holdings and Apollo Investment
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NMI and Apollo is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Apollo Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Investment Corp 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 Apollo Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Investment Corp has no effect on the direction of NMI Holdings i.e., NMI Holdings and Apollo Investment go up and down completely randomly.
Pair Corralation between NMI Holdings and Apollo Investment
Assuming the 90 days horizon NMI Holdings is expected to under-perform the Apollo Investment. In addition to that, NMI Holdings is 1.73 times more volatile than Apollo Investment Corp. It trades about -0.05 of its total potential returns per unit of risk. Apollo Investment Corp is currently generating about 0.22 per unit of volatility. If you would invest 1,226 in Apollo Investment Corp on August 25, 2024 and sell it today you would earn a total of 79.00 from holding Apollo Investment Corp or generate 6.44% 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. Apollo Investment Corp
Performance |
| Timeline |
| NMI Holdings |
| Apollo Investment Corp |
NMI Holdings and Apollo Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Apollo Investment
The main advantage of trading using opposite NMI Holdings and Apollo Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Apollo Investment 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 Apollo Investment will offset losses from the drop in Apollo Investment's long position.| NMI Holdings vs. USWE SPORTS AB | NMI Holdings vs. GungHo Online Entertainment | NMI Holdings vs. Ming Le Sports | NMI Holdings vs. DICKS Sporting Goods |
| Apollo Investment vs. Macquarie Group Limited | Apollo Investment vs. MSCI Inc | Apollo Investment vs. Superior Plus Corp | Apollo Investment vs. NMI 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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