Correlation Between NMI Holdings and Commerzbank
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Commerzbank 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 Commerzbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Commerzbank AG, you can compare the effects of market volatilities on NMI Holdings and Commerzbank 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 Commerzbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Commerzbank.
Diversification Opportunities for NMI Holdings and Commerzbank
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between NMI and Commerzbank is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Commerzbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerzbank AG 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 Commerzbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commerzbank AG has no effect on the direction of NMI Holdings i.e., NMI Holdings and Commerzbank go up and down completely randomly.
Pair Corralation between NMI Holdings and Commerzbank
Assuming the 90 days horizon NMI Holdings is expected to generate 1.24 times more return on investment than Commerzbank. However, NMI Holdings is 1.24 times more volatile than Commerzbank AG. It trades about 0.27 of its potential returns per unit of risk. Commerzbank AG is currently generating about -0.31 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 Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
NMI Holdings vs. Commerzbank AG
Performance |
| Timeline |
| NMI Holdings |
| Commerzbank AG |
NMI Holdings and Commerzbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Commerzbank
The main advantage of trading using opposite NMI Holdings and Commerzbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Commerzbank 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 Commerzbank will offset losses from the drop in Commerzbank's long position.| NMI Holdings vs. HYDROFARM HLD GRP | NMI Holdings vs. VIAPLAY GROUP AB | NMI Holdings vs. Titan Machinery | NMI Holdings vs. SCANSOURCE |
| Commerzbank vs. Superior Plus Corp | Commerzbank vs. NMI Holdings | Commerzbank vs. Origin Agritech | Commerzbank 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |