Correlation Between NMI Holdings and Intuitive Surgical
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Intuitive Surgical 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 Intuitive Surgical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Intuitive Surgical, you can compare the effects of market volatilities on NMI Holdings and Intuitive Surgical 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 Intuitive Surgical. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Intuitive Surgical.
Diversification Opportunities for NMI Holdings and Intuitive Surgical
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NMI and Intuitive is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Intuitive Surgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Surgical 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 Intuitive Surgical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Surgical has no effect on the direction of NMI Holdings i.e., NMI Holdings and Intuitive Surgical go up and down completely randomly.
Pair Corralation between NMI Holdings and Intuitive Surgical
Assuming the 90 days horizon NMI Holdings is expected to generate 1.32 times less return on investment than Intuitive Surgical. But when comparing it to its historical volatility, NMI Holdings is 1.05 times less risky than Intuitive Surgical. It trades about 0.1 of its potential returns per unit of risk. Intuitive Surgical is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 35,630 in Intuitive Surgical on August 25, 2024 and sell it today you would earn a total of 16,860 from holding Intuitive Surgical or generate 47.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. Intuitive Surgical
Performance |
| Timeline |
| NMI Holdings |
| Intuitive Surgical |
NMI Holdings and Intuitive Surgical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Intuitive Surgical
The main advantage of trading using opposite NMI Holdings and Intuitive Surgical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Intuitive Surgical 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 Intuitive Surgical will offset losses from the drop in Intuitive Surgical's long position.| NMI Holdings vs. USWE SPORTS AB | NMI Holdings vs. GungHo Online Entertainment | NMI Holdings vs. Ming Le Sports | NMI Holdings vs. DICKS Sporting Goods |
| Intuitive Surgical vs. HOYA Corporation | Intuitive Surgical vs. Superior Plus Corp | Intuitive Surgical vs. NMI Holdings | Intuitive Surgical vs. Origin Agritech |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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