Correlation Between NMI Holdings and KRISPY KREME
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and KRISPY KREME 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 KRISPY KREME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and KRISPY KREME DL 01, you can compare the effects of market volatilities on NMI Holdings and KRISPY KREME 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 KRISPY KREME. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and KRISPY KREME.
Diversification Opportunities for NMI Holdings and KRISPY KREME
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NMI and KRISPY is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and KRISPY KREME DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRISPY KREME DL 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 KRISPY KREME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRISPY KREME DL has no effect on the direction of NMI Holdings i.e., NMI Holdings and KRISPY KREME go up and down completely randomly.
Pair Corralation between NMI Holdings and KRISPY KREME
Assuming the 90 days horizon NMI Holdings is expected to generate 0.71 times more return on investment than KRISPY KREME. However, NMI Holdings is 1.41 times less risky than KRISPY KREME. It trades about 0.06 of its potential returns per unit of risk. KRISPY KREME DL 01 is currently generating about -0.02 per unit of risk. If you would invest 3,580 in NMI Holdings on August 29, 2024 and sell it today you would earn a total of 100.00 from holding NMI Holdings or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. KRISPY KREME DL 01
Performance |
| Timeline |
| NMI Holdings |
| KRISPY KREME DL |
NMI Holdings and KRISPY KREME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and KRISPY KREME
The main advantage of trading using opposite NMI Holdings and KRISPY KREME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, KRISPY KREME 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 KRISPY KREME will offset losses from the drop in KRISPY KREME's long position.| NMI Holdings vs. Boyd Gaming | NMI Holdings vs. SEI INVESTMENTS | NMI Holdings vs. HK Electric Investments | NMI Holdings vs. WisdomTree Investments |
| KRISPY KREME vs. TOREX SEMICONDUCTOR LTD | KRISPY KREME vs. CARSALESCOM | KRISPY KREME vs. Magnachip Semiconductor | KRISPY KREME vs. Tradeweb Markets |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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