Correlation Between NMI Holdings and AHOLD DELHAIADR16
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and AHOLD DELHAIADR16 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 AHOLD DELHAIADR16 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and AHOLD DELHAIADR16 EO 25, you can compare the effects of market volatilities on NMI Holdings and AHOLD DELHAIADR16 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 AHOLD DELHAIADR16. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and AHOLD DELHAIADR16.
Diversification Opportunities for NMI Holdings and AHOLD DELHAIADR16
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between NMI and AHOLD is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and AHOLD DELHAIADR16 EO 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AHOLD DELHAIADR16 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 AHOLD DELHAIADR16. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AHOLD DELHAIADR16 has no effect on the direction of NMI Holdings i.e., NMI Holdings and AHOLD DELHAIADR16 go up and down completely randomly.
Pair Corralation between NMI Holdings and AHOLD DELHAIADR16
Assuming the 90 days horizon NMI Holdings is expected to generate 1.2 times more return on investment than AHOLD DELHAIADR16. However, NMI Holdings is 1.2 times more volatile than AHOLD DELHAIADR16 EO 25. It trades about 0.12 of its potential returns per unit of risk. AHOLD DELHAIADR16 EO 25 is currently generating about 0.09 per unit of risk. If you would invest 2,720 in NMI Holdings on September 1, 2024 and sell it today you would earn a total of 1,060 from holding NMI Holdings or generate 38.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.48% |
| Values | Daily Returns |
NMI Holdings vs. AHOLD DELHAIADR16 EO 25
Performance |
| Timeline |
| NMI Holdings |
| AHOLD DELHAIADR16 |
NMI Holdings and AHOLD DELHAIADR16 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and AHOLD DELHAIADR16
The main advantage of trading using opposite NMI Holdings and AHOLD DELHAIADR16 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, AHOLD DELHAIADR16 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 AHOLD DELHAIADR16 will offset losses from the drop in AHOLD DELHAIADR16's long position.| NMI Holdings vs. KIMBALL ELECTRONICS | NMI Holdings vs. UET United Electronic | NMI Holdings vs. BYD ELECTRONIC | NMI Holdings vs. Benchmark Electronics |
| AHOLD DELHAIADR16 vs. AGF Management Limited | AHOLD DELHAIADR16 vs. Cleanaway Waste Management | AHOLD DELHAIADR16 vs. Bausch Health Companies | AHOLD DELHAIADR16 vs. Cardinal Health |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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