Correlation Between NMI Holdings and Blackstone
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Blackstone 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 Blackstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Blackstone Group, you can compare the effects of market volatilities on NMI Holdings and Blackstone 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 Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Blackstone.
Diversification Opportunities for NMI Holdings and Blackstone
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NMI and Blackstone is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group 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 Blackstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Group has no effect on the direction of NMI Holdings i.e., NMI Holdings and Blackstone go up and down completely randomly.
Pair Corralation between NMI Holdings and Blackstone
Assuming the 90 days horizon NMI Holdings is expected to generate 2.45 times less return on investment than Blackstone. In addition to that, NMI Holdings is 1.1 times more volatile than Blackstone Group. It trades about 0.13 of its total potential returns per unit of risk. Blackstone Group is currently generating about 0.34 per unit of volatility. If you would invest 15,624 in Blackstone Group on August 30, 2024 and sell it today you would earn a total of 2,760 from holding Blackstone Group or generate 17.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
NMI Holdings vs. Blackstone Group
Performance |
| Timeline |
| NMI Holdings |
| Blackstone Group |
NMI Holdings and Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Blackstone
The main advantage of trading using opposite NMI Holdings and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Blackstone 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 Blackstone will offset losses from the drop in Blackstone's long position.| NMI Holdings vs. Perseus Mining Limited | NMI Holdings vs. CVW CLEANTECH INC | NMI Holdings vs. Warner Music Group | NMI Holdings vs. Tencent Music Entertainment |
| Blackstone vs. Gruppo Mutuionline SpA | Blackstone vs. CapitaLand Investment Limited | Blackstone vs. YATRA ONLINE DL 0001 | Blackstone vs. Chuangs China Investments |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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