Correlation Between NMI Holdings and CTS Eventim
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and CTS Eventim 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 CTS Eventim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and CTS Eventim AG, you can compare the effects of market volatilities on NMI Holdings and CTS Eventim 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 CTS Eventim. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and CTS Eventim.
Diversification Opportunities for NMI Holdings and CTS Eventim
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between NMI and CTS is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and CTS Eventim AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Eventim 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 CTS Eventim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTS Eventim AG has no effect on the direction of NMI Holdings i.e., NMI Holdings and CTS Eventim go up and down completely randomly.
Pair Corralation between NMI Holdings and CTS Eventim
Assuming the 90 days horizon NMI Holdings is expected to generate 0.64 times more return on investment than CTS Eventim. However, NMI Holdings is 1.57 times less risky than CTS Eventim. It trades about 0.06 of its potential returns per unit of risk. CTS Eventim AG is currently generating about -0.2 per unit of risk. If you would invest 3,540 in NMI Holdings on September 20, 2024 and sell it today you would earn a total of 60.00 from holding NMI Holdings or generate 1.69% 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. CTS Eventim AG
Performance |
| Timeline |
| NMI Holdings |
| CTS Eventim AG |
NMI Holdings and CTS Eventim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and CTS Eventim
The main advantage of trading using opposite NMI Holdings and CTS Eventim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, CTS Eventim 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 CTS Eventim will offset losses from the drop in CTS Eventim's long position.| NMI Holdings vs. Insurance Australia Group | NMI Holdings vs. Superior Plus Corp | NMI Holdings vs. SIVERS SEMICONDUCTORS AB | NMI Holdings vs. CHINA HUARONG ENERHD 50 |
| CTS Eventim vs. Live Nation Entertainment | CTS Eventim vs. Toho Co | CTS Eventim vs. Superior Plus Corp | CTS Eventim 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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