Correlation Between NMI Holdings and BANK HANDLOWY
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and BANK HANDLOWY 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 BANK HANDLOWY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and BANK HANDLOWY, you can compare the effects of market volatilities on NMI Holdings and BANK HANDLOWY 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 BANK HANDLOWY. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and BANK HANDLOWY.
Diversification Opportunities for NMI Holdings and BANK HANDLOWY
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between NMI and BANK is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and BANK HANDLOWY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK HANDLOWY 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 BANK HANDLOWY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK HANDLOWY has no effect on the direction of NMI Holdings i.e., NMI Holdings and BANK HANDLOWY go up and down completely randomly.
Pair Corralation between NMI Holdings and BANK HANDLOWY
Assuming the 90 days horizon NMI Holdings is expected to generate 2.17 times more return on investment than BANK HANDLOWY. However, NMI Holdings is 2.17 times more volatile than BANK HANDLOWY. It trades about 0.02 of its potential returns per unit of risk. BANK HANDLOWY is currently generating about -0.15 per unit of risk. If you would invest 3,580 in NMI Holdings on August 28, 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. BANK HANDLOWY
Performance |
| Timeline |
| NMI Holdings |
| BANK HANDLOWY |
NMI Holdings and BANK HANDLOWY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and BANK HANDLOWY
The main advantage of trading using opposite NMI Holdings and BANK HANDLOWY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, BANK HANDLOWY 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 BANK HANDLOWY will offset losses from the drop in BANK HANDLOWY's long position.| NMI Holdings vs. Lion Biotechnologies | NMI Holdings vs. Digilife Technologies Limited | NMI Holdings vs. Food Life Companies | NMI Holdings vs. CONAGRA FOODS |
| BANK HANDLOWY vs. TIANDE CHEMICAL | BANK HANDLOWY vs. ECHO INVESTMENT ZY | BANK HANDLOWY vs. MGIC INVESTMENT | BANK HANDLOWY vs. Marie Brizard Wine |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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