Correlation Between NMI Holdings and MYFAIR GOLD
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and MYFAIR GOLD 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 MYFAIR GOLD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and MYFAIR GOLD P, you can compare the effects of market volatilities on NMI Holdings and MYFAIR GOLD 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 MYFAIR GOLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and MYFAIR GOLD.
Diversification Opportunities for NMI Holdings and MYFAIR GOLD
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between NMI and MYFAIR is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and MYFAIR GOLD P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYFAIR GOLD P 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 MYFAIR GOLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYFAIR GOLD P has no effect on the direction of NMI Holdings i.e., NMI Holdings and MYFAIR GOLD go up and down completely randomly.
Pair Corralation between NMI Holdings and MYFAIR GOLD
Assuming the 90 days horizon NMI Holdings is expected to generate 0.54 times more return on investment than MYFAIR GOLD. However, NMI Holdings is 1.86 times less risky than MYFAIR GOLD. It trades about -0.05 of its potential returns per unit of risk. MYFAIR GOLD P is currently generating about -0.09 per unit of risk. If you would invest 3,660 in NMI Holdings on August 25, 2024 and sell it today you would lose (120.00) from holding NMI Holdings or give up 3.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. MYFAIR GOLD P
Performance |
| Timeline |
| NMI Holdings |
| MYFAIR GOLD P |
NMI Holdings and MYFAIR GOLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and MYFAIR GOLD
The main advantage of trading using opposite NMI Holdings and MYFAIR GOLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, MYFAIR GOLD 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 MYFAIR GOLD will offset losses from the drop in MYFAIR GOLD's long position.| NMI Holdings vs. USWE SPORTS AB | NMI Holdings vs. GungHo Online Entertainment | NMI Holdings vs. Ming Le Sports | NMI Holdings vs. DICKS Sporting Goods |
| MYFAIR GOLD vs. Franco Nevada | MYFAIR GOLD vs. Agnico Eagle Mines | MYFAIR GOLD vs. Superior Plus Corp | MYFAIR GOLD vs. NMI Holdings |
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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