Correlation Between NMI Holdings and Grupo Aval
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Grupo Aval 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 Grupo Aval into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Grupo Aval Acciones, you can compare the effects of market volatilities on NMI Holdings and Grupo Aval 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 Grupo Aval. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Grupo Aval.
Diversification Opportunities for NMI Holdings and Grupo Aval
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between NMI and Grupo is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Grupo Aval Acciones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aval Acciones 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 Grupo Aval. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aval Acciones has no effect on the direction of NMI Holdings i.e., NMI Holdings and Grupo Aval go up and down completely randomly.
Pair Corralation between NMI Holdings and Grupo Aval
Assuming the 90 days horizon NMI Holdings is expected to generate 1.25 times less return on investment than Grupo Aval. In addition to that, NMI Holdings is 1.55 times more volatile than Grupo Aval Acciones. It trades about 0.11 of its total potential returns per unit of risk. Grupo Aval Acciones is currently generating about 0.22 per unit of volatility. If you would invest 177.00 in Grupo Aval Acciones on September 1, 2024 and sell it today you would earn a total of 14.00 from holding Grupo Aval Acciones or generate 7.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
NMI Holdings vs. Grupo Aval Acciones
Performance |
| Timeline |
| NMI Holdings |
| Grupo Aval Acciones |
NMI Holdings and Grupo Aval Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Grupo Aval
The main advantage of trading using opposite NMI Holdings and Grupo Aval positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Grupo Aval 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 Grupo Aval will offset losses from the drop in Grupo Aval's long position.| NMI Holdings vs. KIMBALL ELECTRONICS | NMI Holdings vs. UET United Electronic | NMI Holdings vs. BYD ELECTRONIC | NMI Holdings vs. Benchmark Electronics |
| Grupo Aval vs. Nucletron Electronic Aktiengesellschaft | Grupo Aval vs. UET United Electronic | Grupo Aval vs. Arrow Electronics | Grupo Aval vs. Renesas Electronics |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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