Correlation Between NMI Holdings and ITOCHU
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and ITOCHU 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 ITOCHU into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and ITOCHU, you can compare the effects of market volatilities on NMI Holdings and ITOCHU 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 ITOCHU. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and ITOCHU.
Diversification Opportunities for NMI Holdings and ITOCHU
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between NMI and ITOCHU is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and ITOCHU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITOCHU 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 ITOCHU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITOCHU has no effect on the direction of NMI Holdings i.e., NMI Holdings and ITOCHU go up and down completely randomly.
Pair Corralation between NMI Holdings and ITOCHU
Assuming the 90 days horizon NMI Holdings is expected to under-perform the ITOCHU. In addition to that, NMI Holdings is 1.55 times more volatile than ITOCHU. It trades about -0.09 of its total potential returns per unit of risk. ITOCHU is currently generating about -0.08 per unit of volatility. If you would invest 4,828 in ITOCHU on October 10, 2024 and sell it today you would lose (112.00) from holding ITOCHU or give up 2.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. ITOCHU
Performance |
| Timeline |
| NMI Holdings |
| ITOCHU |
NMI Holdings and ITOCHU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and ITOCHU
The main advantage of trading using opposite NMI Holdings and ITOCHU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, ITOCHU 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 ITOCHU will offset losses from the drop in ITOCHU's long position.| NMI Holdings vs. Austevoll Seafood ASA | NMI Holdings vs. alstria office REIT AG | NMI Holdings vs. United Natural Foods | NMI Holdings vs. CITY OFFICE REIT |
| ITOCHU vs. ALTAIR RES INC | ITOCHU vs. Nanjing Panda Electronics | ITOCHU vs. Westinghouse Air Brake | ITOCHU vs. Arrow Electronics |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |