Correlation Between NMI Holdings and FlatexDEGIRO
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and FlatexDEGIRO 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 FlatexDEGIRO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and flatexDEGIRO AG, you can compare the effects of market volatilities on NMI Holdings and FlatexDEGIRO 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 FlatexDEGIRO. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and FlatexDEGIRO.
Diversification Opportunities for NMI Holdings and FlatexDEGIRO
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NMI and FlatexDEGIRO is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and flatexDEGIRO AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on flatexDEGIRO 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 FlatexDEGIRO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of flatexDEGIRO AG has no effect on the direction of NMI Holdings i.e., NMI Holdings and FlatexDEGIRO go up and down completely randomly.
Pair Corralation between NMI Holdings and FlatexDEGIRO
Assuming the 90 days horizon NMI Holdings is expected to generate 1.77 times more return on investment than FlatexDEGIRO. However, NMI Holdings is 1.77 times more volatile than flatexDEGIRO AG. It trades about 0.12 of its potential returns per unit of risk. flatexDEGIRO AG is currently generating about 0.06 per unit of risk. If you would invest 3,580 in NMI Holdings on August 30, 2024 and sell it today you would earn a total of 220.00 from holding NMI Holdings or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. flatexDEGIRO AG
Performance |
| Timeline |
| NMI Holdings |
| flatexDEGIRO AG |
NMI Holdings and FlatexDEGIRO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and FlatexDEGIRO
The main advantage of trading using opposite NMI Holdings and FlatexDEGIRO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, FlatexDEGIRO 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 FlatexDEGIRO will offset losses from the drop in FlatexDEGIRO's long position.| NMI Holdings vs. Perseus Mining Limited | NMI Holdings vs. CVW CLEANTECH INC | NMI Holdings vs. Warner Music Group | NMI Holdings vs. Tencent Music Entertainment |
| FlatexDEGIRO vs. FANDIFI TECHNOLOGY P | FlatexDEGIRO vs. ALGOMA STEEL GROUP | FlatexDEGIRO vs. NIPPON STEEL SPADR | FlatexDEGIRO vs. Sunny Optical Technology |
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.
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