Correlation Between NMI Holdings and KION Group
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and KION Group 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 KION Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and KION Group AG, you can compare the effects of market volatilities on NMI Holdings and KION Group 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 KION Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and KION Group.
Diversification Opportunities for NMI Holdings and KION Group
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between NMI and KION is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and KION Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KION Group AG 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 KION Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KION Group AG has no effect on the direction of NMI Holdings i.e., NMI Holdings and KION Group go up and down completely randomly.
Pair Corralation between NMI Holdings and KION Group
Assuming the 90 days horizon NMI Holdings is expected to generate 0.84 times more return on investment than KION Group. However, NMI Holdings is 1.19 times less risky than KION Group. It trades about 0.04 of its potential returns per unit of risk. KION Group AG is currently generating about -0.15 per unit of risk. If you would invest 3,580 in NMI Holdings on August 28, 2024 and sell it today you would earn a total of 60.00 from holding NMI Holdings or generate 1.68% 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. KION Group AG
Performance |
| Timeline |
| NMI Holdings |
| KION Group AG |
NMI Holdings and KION Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and KION Group
The main advantage of trading using opposite NMI Holdings and KION Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, KION Group 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 KION Group will offset losses from the drop in KION Group's long position.| NMI Holdings vs. CSSC Offshore Marine | NMI Holdings vs. SIEM OFFSHORE NEW | NMI Holdings vs. PARKEN Sport Entertainment | NMI Holdings vs. SK TELECOM TDADR |
| KION Group vs. EAST SIDE GAMES | KION Group vs. Townsquare Media | KION Group vs. Hollywood Bowl Group | KION Group vs. Ubisoft Entertainment SA |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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