Correlation Between NMI Holdings and Assicurazioni Generali
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Assicurazioni Generali 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 Assicurazioni Generali into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Assicurazioni Generali SpA, you can compare the effects of market volatilities on NMI Holdings and Assicurazioni Generali 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 Assicurazioni Generali. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Assicurazioni Generali.
Diversification Opportunities for NMI Holdings and Assicurazioni Generali
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NMI and Assicurazioni is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Assicurazioni Generali SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assicurazioni Generali 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 Assicurazioni Generali. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assicurazioni Generali has no effect on the direction of NMI Holdings i.e., NMI Holdings and Assicurazioni Generali go up and down completely randomly.
Pair Corralation between NMI Holdings and Assicurazioni Generali
Assuming the 90 days horizon NMI Holdings is expected to generate 1.24 times more return on investment than Assicurazioni Generali. However, NMI Holdings is 1.24 times more volatile than Assicurazioni Generali SpA. It trades about 0.27 of its potential returns per unit of risk. Assicurazioni Generali SpA is currently generating about 0.14 per unit of risk. If you would invest 3,360 in NMI Holdings on September 4, 2024 and sell it today you would earn a total of 400.00 from holding NMI Holdings or generate 11.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
NMI Holdings vs. Assicurazioni Generali SpA
Performance |
| Timeline |
| NMI Holdings |
| Assicurazioni Generali |
NMI Holdings and Assicurazioni Generali Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Assicurazioni Generali
The main advantage of trading using opposite NMI Holdings and Assicurazioni Generali positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Assicurazioni Generali 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 Assicurazioni Generali will offset losses from the drop in Assicurazioni Generali's long position.| NMI Holdings vs. HYDROFARM HLD GRP | NMI Holdings vs. VIAPLAY GROUP AB | NMI Holdings vs. Titan Machinery | NMI Holdings vs. SCANSOURCE |
| Assicurazioni Generali vs. Berkshire Hathaway | Assicurazioni Generali vs. Berkshire Hathaway | Assicurazioni Generali vs. Superior Plus Corp | Assicurazioni Generali vs. NMI Holdings |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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