Correlation Between NMI Holdings and Cooper-Standard Holdings
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Cooper-Standard Holdings 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 Cooper-Standard Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Cooper Standard Holdings, you can compare the effects of market volatilities on NMI Holdings and Cooper-Standard Holdings 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 Cooper-Standard Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Cooper-Standard Holdings.
Diversification Opportunities for NMI Holdings and Cooper-Standard Holdings
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NMI and Cooper-Standard is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Cooper Standard Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Standard Holdings 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 Cooper-Standard Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cooper Standard Holdings has no effect on the direction of NMI Holdings i.e., NMI Holdings and Cooper-Standard Holdings go up and down completely randomly.
Pair Corralation between NMI Holdings and Cooper-Standard Holdings
Assuming the 90 days horizon NMI Holdings is expected to generate 1.9 times less return on investment than Cooper-Standard Holdings. But when comparing it to its historical volatility, NMI Holdings is 3.11 times less risky than Cooper-Standard Holdings. It trades about 0.09 of its potential returns per unit of risk. Cooper Standard Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 610.00 in Cooper Standard Holdings on August 27, 2024 and sell it today you would earn a total of 720.00 from holding Cooper Standard Holdings or generate 118.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. Cooper Standard Holdings
Performance |
| Timeline |
| NMI Holdings |
| Cooper Standard Holdings |
NMI Holdings and Cooper-Standard Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Cooper-Standard Holdings
The main advantage of trading using opposite NMI Holdings and Cooper-Standard Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Cooper-Standard Holdings 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 Cooper-Standard Holdings will offset losses from the drop in Cooper-Standard Holdings' long position.| NMI Holdings vs. Aedas Homes SA | NMI Holdings vs. MTI WIRELESS EDGE | NMI Holdings vs. Spirent Communications plc | NMI Holdings vs. Citic Telecom International |
| Cooper-Standard Holdings vs. Superior Plus Corp | Cooper-Standard Holdings vs. NMI Holdings | Cooper-Standard Holdings vs. Origin Agritech | Cooper-Standard Holdings vs. SIVERS SEMICONDUCTORS AB |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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