Correlation Between NMI Holdings and AutoZone
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and AutoZone 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 AutoZone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and AutoZone, you can compare the effects of market volatilities on NMI Holdings and AutoZone 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 AutoZone. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and AutoZone.
Diversification Opportunities for NMI Holdings and AutoZone
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between NMI and AutoZone is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and AutoZone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AutoZone 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 AutoZone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AutoZone has no effect on the direction of NMI Holdings i.e., NMI Holdings and AutoZone go up and down completely randomly.
Pair Corralation between NMI Holdings and AutoZone
Assuming the 90 days horizon NMI Holdings is expected to generate 1.16 times more return on investment than AutoZone. However, NMI Holdings is 1.16 times more volatile than AutoZone. It trades about 0.11 of its potential returns per unit of risk. AutoZone is currently generating about 0.03 per unit of risk. If you would invest 2,860 in NMI Holdings on September 3, 2024 and sell it today you would earn a total of 900.00 from holding NMI Holdings or generate 31.47% 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. AutoZone
Performance |
| Timeline |
| NMI Holdings |
| AutoZone |
NMI Holdings and AutoZone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and AutoZone
The main advantage of trading using opposite NMI Holdings and AutoZone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, AutoZone 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 AutoZone will offset losses from the drop in AutoZone's long position.| NMI Holdings vs. Harmony Gold Mining | NMI Holdings vs. WT OFFSHORE | NMI Holdings vs. Luckin Coffee | NMI Holdings vs. BJs Restaurants |
| AutoZone vs. NORTHEAST UTILITIES | AutoZone vs. GameStop Corp | AutoZone vs. HOCHSCHILD MINING | AutoZone vs. VARIOUS EATERIES LS |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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