Correlation Between NMI Holdings and Chalice Mining
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Chalice Mining 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 Chalice Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Chalice Mining Limited, you can compare the effects of market volatilities on NMI Holdings and Chalice Mining 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 Chalice Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Chalice Mining.
Diversification Opportunities for NMI Holdings and Chalice Mining
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between NMI and Chalice is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Chalice Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chalice Mining 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 Chalice Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chalice Mining has no effect on the direction of NMI Holdings i.e., NMI Holdings and Chalice Mining go up and down completely randomly.
Pair Corralation between NMI Holdings and Chalice Mining
Assuming the 90 days horizon NMI Holdings is expected to generate 0.71 times more return on investment than Chalice Mining. However, NMI Holdings is 1.41 times less risky than Chalice Mining. It trades about -0.14 of its potential returns per unit of risk. Chalice Mining Limited is currently generating about -0.16 per unit of risk. If you would invest 3,600 in NMI Holdings on October 16, 2024 and sell it today you would lose (140.00) from holding NMI Holdings or give up 3.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. Chalice Mining Limited
Performance |
| Timeline |
| NMI Holdings |
| Chalice Mining |
NMI Holdings and Chalice Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Chalice Mining
The main advantage of trading using opposite NMI Holdings and Chalice Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Chalice Mining 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 Chalice Mining will offset losses from the drop in Chalice Mining's long position.| NMI Holdings vs. AOYAMA TRADING | NMI Holdings vs. Advanced Medical Solutions | NMI Holdings vs. Inspire Medical Systems | NMI Holdings vs. ONWARD MEDICAL BV |
| Chalice Mining vs. Wheaton Precious Metals | Chalice Mining vs. Superior Plus Corp | Chalice Mining vs. NMI Holdings | Chalice Mining 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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