Correlation Between NMI Holdings and COSCO SHIPPING
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and COSCO SHIPPING 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 COSCO SHIPPING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and COSCO SHIPPING Energy, you can compare the effects of market volatilities on NMI Holdings and COSCO SHIPPING 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 COSCO SHIPPING. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and COSCO SHIPPING.
Diversification Opportunities for NMI Holdings and COSCO SHIPPING
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NMI and COSCO is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and COSCO SHIPPING Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING Energy 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 COSCO SHIPPING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSCO SHIPPING Energy has no effect on the direction of NMI Holdings i.e., NMI Holdings and COSCO SHIPPING go up and down completely randomly.
Pair Corralation between NMI Holdings and COSCO SHIPPING
Assuming the 90 days horizon NMI Holdings is expected to generate 2.08 times less return on investment than COSCO SHIPPING. But when comparing it to its historical volatility, NMI Holdings is 3.77 times less risky than COSCO SHIPPING. It trades about 0.27 of its potential returns per unit of risk. COSCO SHIPPING Energy is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 59.00 in COSCO SHIPPING Energy on September 4, 2024 and sell it today you would earn a total of 13.00 from holding COSCO SHIPPING Energy or generate 22.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
NMI Holdings vs. COSCO SHIPPING Energy
Performance |
| Timeline |
| NMI Holdings |
| COSCO SHIPPING Energy |
NMI Holdings and COSCO SHIPPING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and COSCO SHIPPING
The main advantage of trading using opposite NMI Holdings and COSCO SHIPPING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, COSCO SHIPPING 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 COSCO SHIPPING will offset losses from the drop in COSCO SHIPPING's long position.| NMI Holdings vs. HYDROFARM HLD GRP | NMI Holdings vs. VIAPLAY GROUP AB | NMI Holdings vs. Titan Machinery | NMI Holdings vs. SCANSOURCE |
| COSCO SHIPPING vs. SOLSTAD OFFSHORE NK | COSCO SHIPPING vs. MICRONIC MYDATA | COSCO SHIPPING vs. DATANG INTL POW | COSCO SHIPPING vs. Tencent Music Entertainment |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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