Correlation Between NMI Holdings and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and CompuGroup Medical 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 CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and CompuGroup Medical SE, you can compare the effects of market volatilities on NMI Holdings and CompuGroup Medical 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 CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and CompuGroup Medical.
Diversification Opportunities for NMI Holdings and CompuGroup Medical
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NMI and CompuGroup is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical 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 CompuGroup Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CompuGroup Medical has no effect on the direction of NMI Holdings i.e., NMI Holdings and CompuGroup Medical go up and down completely randomly.
Pair Corralation between NMI Holdings and CompuGroup Medical
Assuming the 90 days horizon NMI Holdings is expected to under-perform the CompuGroup Medical. In addition to that, NMI Holdings is 1.02 times more volatile than CompuGroup Medical SE. It trades about -0.05 of its total potential returns per unit of risk. CompuGroup Medical SE is currently generating about 0.04 per unit of volatility. If you would invest 1,388 in CompuGroup Medical SE on August 25, 2024 and sell it today you would earn a total of 17.00 from holding CompuGroup Medical SE or generate 1.22% 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. CompuGroup Medical SE
Performance |
| Timeline |
| NMI Holdings |
| CompuGroup Medical |
NMI Holdings and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and CompuGroup Medical
The main advantage of trading using opposite NMI Holdings and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, CompuGroup Medical 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 CompuGroup Medical will offset losses from the drop in CompuGroup Medical's long position.| NMI Holdings vs. Lion One Metals | NMI Holdings vs. Harmony Gold Mining | NMI Holdings vs. OFFICE DEPOT | NMI Holdings vs. JAPAN TOBACCO UNSPADR12 |
| CompuGroup Medical vs. Evolent Health | CompuGroup Medical vs. Compugroup Medical SE | CompuGroup Medical vs. Superior Plus Corp | CompuGroup Medical vs. NMI Holdings |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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