Correlation Between NMI Holdings and FOX CORP
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and FOX CORP 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 FOX CORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and FOX P B, you can compare the effects of market volatilities on NMI Holdings and FOX CORP 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 FOX CORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and FOX CORP.
Diversification Opportunities for NMI Holdings and FOX CORP
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between NMI and FOX is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and FOX P B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOX CORP 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 FOX CORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOX CORP has no effect on the direction of NMI Holdings i.e., NMI Holdings and FOX CORP go up and down completely randomly.
Pair Corralation between NMI Holdings and FOX CORP
Assuming the 90 days horizon NMI Holdings is expected to generate 1.05 times more return on investment than FOX CORP. However, NMI Holdings is 1.05 times more volatile than FOX P B. It trades about 0.09 of its potential returns per unit of risk. FOX P B is currently generating about 0.06 per unit of risk. If you would invest 1,900 in NMI Holdings on September 3, 2024 and sell it today you would earn a total of 1,860 from holding NMI Holdings or generate 97.89% 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. FOX P B
Performance |
| Timeline |
| NMI Holdings |
| FOX CORP |
NMI Holdings and FOX CORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and FOX CORP
The main advantage of trading using opposite NMI Holdings and FOX CORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, FOX CORP 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 FOX CORP will offset losses from the drop in FOX CORP's long position.| NMI Holdings vs. Harmony Gold Mining | NMI Holdings vs. WT OFFSHORE | NMI Holdings vs. Luckin Coffee | NMI Holdings vs. BJs Restaurants |
| FOX CORP vs. Vivendi SE | FOX CORP vs. RTL GROUP UNSPADR | FOX CORP vs. Superior Plus Corp | FOX CORP 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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