Correlation Between NMI Holdings and Aena SME
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Aena SME 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 Aena SME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Aena SME SA, you can compare the effects of market volatilities on NMI Holdings and Aena SME 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 Aena SME. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Aena SME.
Diversification Opportunities for NMI Holdings and Aena SME
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between NMI and Aena is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Aena SME SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aena SME 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 Aena SME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aena SME SA has no effect on the direction of NMI Holdings i.e., NMI Holdings and Aena SME go up and down completely randomly.
Pair Corralation between NMI Holdings and Aena SME
Assuming the 90 days horizon NMI Holdings is expected to generate 2.92 times more return on investment than Aena SME. However, NMI Holdings is 2.92 times more volatile than Aena SME SA. It trades about 0.13 of its potential returns per unit of risk. Aena SME SA is currently generating about -0.01 per unit of risk. If you would invest 3,540 in NMI Holdings on September 2, 2024 and sell it today you would earn a total of 220.00 from holding NMI Holdings or generate 6.21% 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. Aena SME SA
Performance |
| Timeline |
| NMI Holdings |
| Aena SME SA |
NMI Holdings and Aena SME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Aena SME
The main advantage of trading using opposite NMI Holdings and Aena SME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Aena SME 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 Aena SME will offset losses from the drop in Aena SME's long position.| NMI Holdings vs. Taylor Morrison Home | NMI Holdings vs. ATRYS HEALTH SA | NMI Holdings vs. National Health Investors | NMI Holdings vs. Bumrungrad Hospital Public |
| Aena SME vs. Superior Plus Corp | Aena SME vs. NMI Holdings | Aena SME vs. Origin Agritech | Aena SME 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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