Correlation Between NMI Holdings and Hyster-Yale Materials
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Hyster-Yale Materials 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 Hyster-Yale Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Hyster Yale Materials Handling, you can compare the effects of market volatilities on NMI Holdings and Hyster-Yale Materials 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 Hyster-Yale Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Hyster-Yale Materials.
Diversification Opportunities for NMI Holdings and Hyster-Yale Materials
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NMI and Hyster-Yale is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Hyster Yale Materials Handling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyster Yale Materials 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 Hyster-Yale Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyster Yale Materials has no effect on the direction of NMI Holdings i.e., NMI Holdings and Hyster-Yale Materials go up and down completely randomly.
Pair Corralation between NMI Holdings and Hyster-Yale Materials
Assuming the 90 days horizon NMI Holdings is expected to generate 0.59 times more return on investment than Hyster-Yale Materials. However, NMI Holdings is 1.71 times less risky than Hyster-Yale Materials. It trades about -0.05 of its potential returns per unit of risk. Hyster Yale Materials Handling is currently generating about -0.17 per unit of risk. If you would invest 3,660 in NMI Holdings on August 25, 2024 and sell it today you would lose (120.00) from holding NMI Holdings or give up 3.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. Hyster Yale Materials Handling
Performance |
| Timeline |
| NMI Holdings |
| Hyster Yale Materials |
NMI Holdings and Hyster-Yale Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Hyster-Yale Materials
The main advantage of trading using opposite NMI Holdings and Hyster-Yale Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Hyster-Yale Materials 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 Hyster-Yale Materials will offset losses from the drop in Hyster-Yale Materials' long position.| NMI Holdings vs. Lion One Metals | NMI Holdings vs. Harmony Gold Mining | NMI Holdings vs. OFFICE DEPOT | NMI Holdings vs. JAPAN TOBACCO UNSPADR12 |
| Hyster-Yale Materials vs. KION Group AG | Hyster-Yale Materials vs. Sinotruk Limited | Hyster-Yale Materials vs. Superior Plus Corp | Hyster-Yale Materials 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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