Correlation Between NMI Holdings and Elis SA
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Elis SA 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 Elis SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Elis SA, you can compare the effects of market volatilities on NMI Holdings and Elis SA 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 Elis SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Elis SA.
Diversification Opportunities for NMI Holdings and Elis SA
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NMI and Elis is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Elis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elis SA 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 Elis SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elis SA has no effect on the direction of NMI Holdings i.e., NMI Holdings and Elis SA go up and down completely randomly.
Pair Corralation between NMI Holdings and Elis SA
Assuming the 90 days horizon NMI Holdings is expected to generate 0.93 times more return on investment than Elis SA. However, NMI Holdings is 1.08 times less risky than Elis SA. It trades about 0.22 of its potential returns per unit of risk. Elis SA is currently generating about -0.39 per unit of risk. If you would invest 3,460 in NMI Holdings on September 12, 2024 and sell it today you would earn a total of 240.00 from holding NMI Holdings or generate 6.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. Elis SA
Performance |
| Timeline |
| NMI Holdings |
| Elis SA |
NMI Holdings and Elis SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Elis SA
The main advantage of trading using opposite NMI Holdings and Elis SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Elis SA 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 Elis SA will offset losses from the drop in Elis SA's long position.| NMI Holdings vs. Nufarm Limited | NMI Holdings vs. AVITA Medical | NMI Holdings vs. Sterling Construction | NMI Holdings vs. Avanos Medical |
| Elis SA vs. Cintas | Elis SA vs. RELO GROUP INC | Elis SA vs. Superior Plus Corp | Elis SA 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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