Correlation Between NMI Holdings and HAPAG LLOYD
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and HAPAG LLOYD 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 HAPAG LLOYD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and HAPAG LLOYD UNSPADR 12, you can compare the effects of market volatilities on NMI Holdings and HAPAG LLOYD 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 HAPAG LLOYD. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and HAPAG LLOYD.
Diversification Opportunities for NMI Holdings and HAPAG LLOYD
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NMI and HAPAG is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and HAPAG LLOYD UNSPADR 12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAPAG LLOYD UNSPADR 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 HAPAG LLOYD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAPAG LLOYD UNSPADR has no effect on the direction of NMI Holdings i.e., NMI Holdings and HAPAG LLOYD go up and down completely randomly.
Pair Corralation between NMI Holdings and HAPAG LLOYD
Assuming the 90 days horizon NMI Holdings is expected to generate 0.35 times more return on investment than HAPAG LLOYD. However, NMI Holdings is 2.82 times less risky than HAPAG LLOYD. It trades about 0.08 of its potential returns per unit of risk. HAPAG LLOYD UNSPADR 12 is currently generating about 0.0 per unit of risk. If you would invest 2,000 in NMI Holdings on November 27, 2024 and sell it today you would earn a total of 1,320 from holding NMI Holdings or generate 66.0% 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. HAPAG LLOYD UNSPADR 12
Performance |
| Timeline |
| NMI Holdings |
| HAPAG LLOYD UNSPADR |
NMI Holdings and HAPAG LLOYD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and HAPAG LLOYD
The main advantage of trading using opposite NMI Holdings and HAPAG LLOYD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, HAPAG LLOYD 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 HAPAG LLOYD will offset losses from the drop in HAPAG LLOYD's long position.| NMI Holdings vs. China Southern Airlines | NMI Holdings vs. Gol Intelligent Airlines | NMI Holdings vs. International Consolidated Airlines | NMI Holdings vs. CARSALESCOM |
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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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