Correlation Between NMI Holdings and Expat Czech
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Expat Czech 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 Expat Czech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Expat Czech PX, you can compare the effects of market volatilities on NMI Holdings and Expat Czech 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 Expat Czech. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Expat Czech.
Diversification Opportunities for NMI Holdings and Expat Czech
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NMI and Expat is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Expat Czech PX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expat Czech PX 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 Expat Czech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expat Czech PX has no effect on the direction of NMI Holdings i.e., NMI Holdings and Expat Czech go up and down completely randomly.
Pair Corralation between NMI Holdings and Expat Czech
Assuming the 90 days horizon NMI Holdings is expected to generate 3.71 times more return on investment than Expat Czech. However, NMI Holdings is 3.71 times more volatile than Expat Czech PX. It trades about 0.13 of its potential returns per unit of risk. Expat Czech PX is currently generating about 0.2 per unit of risk. If you would invest 3,540 in NMI Holdings on September 2, 2024 and sell it today you would earn a total of 220.00 from holding NMI Holdings or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. Expat Czech PX
Performance |
| Timeline |
| NMI Holdings |
| Expat Czech PX |
NMI Holdings and Expat Czech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Expat Czech
The main advantage of trading using opposite NMI Holdings and Expat Czech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Expat Czech 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 Expat Czech will offset losses from the drop in Expat Czech's long position.| NMI Holdings vs. Taylor Morrison Home | NMI Holdings vs. ATRYS HEALTH SA | NMI Holdings vs. National Health Investors | NMI Holdings vs. Bumrungrad Hospital Public |
| Expat Czech vs. Expat Croatia Crobex | Expat Czech vs. Expat Serbia Belex15 | Expat Czech vs. Expat Poland WIG20 | Expat Czech vs. Expat Slovenia SBI |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |