Correlation Between NMI Holdings and GOODTECH ASA
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and GOODTECH ASA 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 GOODTECH ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and GOODTECH ASA A, you can compare the effects of market volatilities on NMI Holdings and GOODTECH ASA 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 GOODTECH ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and GOODTECH ASA.
Diversification Opportunities for NMI Holdings and GOODTECH ASA
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NMI and GOODTECH is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and GOODTECH ASA A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOODTECH ASA A 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 GOODTECH ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOODTECH ASA A has no effect on the direction of NMI Holdings i.e., NMI Holdings and GOODTECH ASA go up and down completely randomly.
Pair Corralation between NMI Holdings and GOODTECH ASA
Assuming the 90 days horizon NMI Holdings is expected to generate 1.29 times more return on investment than GOODTECH ASA. However, NMI Holdings is 1.29 times more volatile than GOODTECH ASA A. It trades about 0.13 of its potential returns per unit of risk. GOODTECH ASA A is currently generating about -0.11 per unit of risk. If you would invest 3,540 in NMI Holdings on September 2, 2024 and sell it today you would earn a total of 220.00 from holding NMI Holdings or generate 6.21% 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. GOODTECH ASA A
Performance |
| Timeline |
| NMI Holdings |
| GOODTECH ASA A |
NMI Holdings and GOODTECH ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and GOODTECH ASA
The main advantage of trading using opposite NMI Holdings and GOODTECH ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, GOODTECH ASA 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 GOODTECH ASA will offset losses from the drop in GOODTECH ASA's long position.| NMI Holdings vs. Taylor Morrison Home | NMI Holdings vs. ATRYS HEALTH SA | NMI Holdings vs. National Health Investors | NMI Holdings vs. Bumrungrad Hospital Public |
| GOODTECH ASA vs. Larsen Toubro Limited | GOODTECH ASA vs. Superior Plus Corp | GOODTECH ASA vs. NMI Holdings | GOODTECH ASA vs. Origin Agritech |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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