Correlation Between NMI Holdings and Gladstone Commercial
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Gladstone Commercial 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 Gladstone Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Gladstone Commercial, you can compare the effects of market volatilities on NMI Holdings and Gladstone Commercial 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 Gladstone Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Gladstone Commercial.
Diversification Opportunities for NMI Holdings and Gladstone Commercial
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NMI and Gladstone is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Gladstone Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Commercial 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 Gladstone Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Commercial has no effect on the direction of NMI Holdings i.e., NMI Holdings and Gladstone Commercial go up and down completely randomly.
Pair Corralation between NMI Holdings and Gladstone Commercial
Assuming the 90 days horizon NMI Holdings is expected to generate 0.68 times more return on investment than Gladstone Commercial. However, NMI Holdings is 1.48 times less risky than Gladstone Commercial. It trades about 0.09 of its potential returns per unit of risk. Gladstone Commercial is currently generating about 0.02 per unit of risk. If you would invest 1,860 in NMI Holdings on August 29, 2024 and sell it today you would earn a total of 1,820 from holding NMI Holdings or generate 97.85% 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. Gladstone Commercial
Performance |
| Timeline |
| NMI Holdings |
| Gladstone Commercial |
NMI Holdings and Gladstone Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Gladstone Commercial
The main advantage of trading using opposite NMI Holdings and Gladstone Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Gladstone Commercial 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 Gladstone Commercial will offset losses from the drop in Gladstone Commercial's long position.| NMI Holdings vs. Boyd Gaming | NMI Holdings vs. SEI INVESTMENTS | NMI Holdings vs. HK Electric Investments | NMI Holdings vs. WisdomTree Investments |
| Gladstone Commercial vs. Superior Plus Corp | Gladstone Commercial vs. NMI Holdings | Gladstone Commercial vs. SIVERS SEMICONDUCTORS AB | Gladstone Commercial vs. Talanx AG |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |