Correlation Between NMI Holdings and ANSYS
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and ANSYS 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 ANSYS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and ANSYS Inc, you can compare the effects of market volatilities on NMI Holdings and ANSYS 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 ANSYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and ANSYS.
Diversification Opportunities for NMI Holdings and ANSYS
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between NMI and ANSYS is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and ANSYS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANSYS Inc 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 ANSYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANSYS Inc has no effect on the direction of NMI Holdings i.e., NMI Holdings and ANSYS go up and down completely randomly.
Pair Corralation between NMI Holdings and ANSYS
Assuming the 90 days horizon NMI Holdings is expected to generate 0.88 times more return on investment than ANSYS. However, NMI Holdings is 1.13 times less risky than ANSYS. It trades about 0.11 of its potential returns per unit of risk. ANSYS Inc is currently generating about 0.06 per unit of risk. If you would invest 2,540 in NMI Holdings on September 2, 2024 and sell it today you would earn a total of 1,220 from holding NMI Holdings or generate 48.03% 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. ANSYS Inc
Performance |
| Timeline |
| NMI Holdings |
| ANSYS Inc |
NMI Holdings and ANSYS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and ANSYS
The main advantage of trading using opposite NMI Holdings and ANSYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, ANSYS 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 ANSYS will offset losses from the drop in ANSYS'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 |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |