Correlation Between NMI Holdings and AmerisourceBergen
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and AmerisourceBergen 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 AmerisourceBergen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and AmerisourceBergen, you can compare the effects of market volatilities on NMI Holdings and AmerisourceBergen 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 AmerisourceBergen. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and AmerisourceBergen.
Diversification Opportunities for NMI Holdings and AmerisourceBergen
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NMI and AmerisourceBergen is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and AmerisourceBergen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmerisourceBergen 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 AmerisourceBergen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmerisourceBergen has no effect on the direction of NMI Holdings i.e., NMI Holdings and AmerisourceBergen go up and down completely randomly.
Pair Corralation between NMI Holdings and AmerisourceBergen
Assuming the 90 days horizon NMI Holdings is expected to generate 1.17 times more return on investment than AmerisourceBergen. However, NMI Holdings is 1.17 times more volatile than AmerisourceBergen. It trades about 0.1 of its potential returns per unit of risk. AmerisourceBergen is currently generating about 0.08 per unit of risk. If you would invest 2,600 in NMI Holdings on September 4, 2024 and sell it today you would earn a total of 1,160 from holding NMI Holdings or generate 44.62% 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. AmerisourceBergen
Performance |
| Timeline |
| NMI Holdings |
| AmerisourceBergen |
NMI Holdings and AmerisourceBergen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and AmerisourceBergen
The main advantage of trading using opposite NMI Holdings and AmerisourceBergen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, AmerisourceBergen 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 AmerisourceBergen will offset losses from the drop in AmerisourceBergen's long position.| NMI Holdings vs. HYDROFARM HLD GRP | NMI Holdings vs. VIAPLAY GROUP AB | NMI Holdings vs. Titan Machinery | NMI Holdings vs. SCANSOURCE |
| AmerisourceBergen vs. Superior Plus Corp | AmerisourceBergen vs. NMI Holdings | AmerisourceBergen vs. Origin Agritech | AmerisourceBergen 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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