Correlation Between NMI Holdings and Kilroy Realty
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Kilroy Realty 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 Kilroy Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Kilroy Realty Corp, you can compare the effects of market volatilities on NMI Holdings and Kilroy Realty 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 Kilroy Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Kilroy Realty.
Diversification Opportunities for NMI Holdings and Kilroy Realty
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between NMI and Kilroy is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Kilroy Realty Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kilroy Realty Corp 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 Kilroy Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kilroy Realty Corp has no effect on the direction of NMI Holdings i.e., NMI Holdings and Kilroy Realty go up and down completely randomly.
Pair Corralation between NMI Holdings and Kilroy Realty
Assuming the 90 days horizon NMI Holdings is expected to generate 1.09 times more return on investment than Kilroy Realty. However, NMI Holdings is 1.09 times more volatile than Kilroy Realty Corp. It trades about 0.27 of its potential returns per unit of risk. Kilroy Realty Corp is currently generating about 0.18 per unit of risk. If you would invest 3,360 in NMI Holdings on September 3, 2024 and sell it today you would earn a total of 400.00 from holding NMI Holdings or generate 11.9% 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. Kilroy Realty Corp
Performance |
| Timeline |
| NMI Holdings |
| Kilroy Realty Corp |
NMI Holdings and Kilroy Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Kilroy Realty
The main advantage of trading using opposite NMI Holdings and Kilroy Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Kilroy Realty 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 Kilroy Realty will offset losses from the drop in Kilroy Realty's long position.| NMI Holdings vs. Harmony Gold Mining | NMI Holdings vs. WT OFFSHORE | NMI Holdings vs. Luckin Coffee | NMI Holdings vs. BJs Restaurants |
| Kilroy Realty vs. SL Green Realty | Kilroy Realty vs. Superior Plus Corp | Kilroy Realty vs. NMI Holdings | Kilroy Realty 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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