Correlation Between NMI Holdings and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Diamyd 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 Diamyd 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 Diamyd Medical AB, you can compare the effects of market volatilities on NMI Holdings and Diamyd 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 Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Diamyd Medical.
Diversification Opportunities for NMI Holdings and Diamyd Medical
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NMI and Diamyd is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Diamyd Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamyd Medical AB 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 Diamyd Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamyd Medical AB has no effect on the direction of NMI Holdings i.e., NMI Holdings and Diamyd Medical go up and down completely randomly.
Pair Corralation between NMI Holdings and Diamyd Medical
Assuming the 90 days horizon NMI Holdings is expected to generate 0.71 times more return on investment than Diamyd Medical. However, NMI Holdings is 1.41 times less risky than Diamyd Medical. It trades about -0.05 of its potential returns per unit of risk. Diamyd Medical AB is currently generating about -0.13 per unit of risk. If you would invest 3,660 in NMI Holdings on August 25, 2024 and sell it today you would lose (120.00) from holding NMI Holdings or give up 3.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. Diamyd Medical AB
Performance |
| Timeline |
| NMI Holdings |
| Diamyd Medical AB |
NMI Holdings and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Diamyd Medical
The main advantage of trading using opposite NMI Holdings and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Diamyd 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 Diamyd Medical will offset losses from the drop in Diamyd Medical's long position.| NMI Holdings vs. USWE SPORTS AB | NMI Holdings vs. GungHo Online Entertainment | NMI Holdings vs. Ming Le Sports | NMI Holdings vs. DICKS Sporting Goods |
| Diamyd Medical vs. ASPEN TECHINC DL | Diamyd Medical vs. REGAL ASIAN INVESTMENTS | Diamyd Medical vs. Sunny Optical Technology | Diamyd Medical vs. CapitaLand Investment Limited |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |