Correlation Between NMI Holdings and ARDAGH METAL
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and ARDAGH METAL 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 ARDAGH METAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and ARDAGH METAL PACDL 0001, you can compare the effects of market volatilities on NMI Holdings and ARDAGH METAL 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 ARDAGH METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and ARDAGH METAL.
Diversification Opportunities for NMI Holdings and ARDAGH METAL
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NMI and ARDAGH is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and ARDAGH METAL PACDL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARDAGH METAL PACDL 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 ARDAGH METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARDAGH METAL PACDL has no effect on the direction of NMI Holdings i.e., NMI Holdings and ARDAGH METAL go up and down completely randomly.
Pair Corralation between NMI Holdings and ARDAGH METAL
Assuming the 90 days horizon NMI Holdings is expected to generate 0.42 times more return on investment than ARDAGH METAL. However, NMI Holdings is 2.38 times less risky than ARDAGH METAL. It trades about 0.1 of its potential returns per unit of risk. ARDAGH METAL PACDL 0001 is currently generating about 0.03 per unit of risk. If you would invest 2,140 in NMI Holdings on August 29, 2024 and sell it today you would earn a total of 1,500 from holding NMI Holdings or generate 70.09% 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. ARDAGH METAL PACDL 0001
Performance |
| Timeline |
| NMI Holdings |
| ARDAGH METAL PACDL |
NMI Holdings and ARDAGH METAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and ARDAGH METAL
The main advantage of trading using opposite NMI Holdings and ARDAGH METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, ARDAGH METAL 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 ARDAGH METAL will offset losses from the drop in ARDAGH METAL's long position.| NMI Holdings vs. CSSC Offshore Marine | NMI Holdings vs. SIEM OFFSHORE NEW | NMI Holdings vs. PARKEN Sport Entertainment | NMI Holdings vs. SK TELECOM TDADR |
| ARDAGH METAL vs. AptarGroup | ARDAGH METAL vs. Superior Plus Corp | ARDAGH METAL vs. NMI Holdings | ARDAGH METAL 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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