Correlation Between NMI Holdings and LOANDEPOT INC
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and LOANDEPOT INC 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 LOANDEPOT INC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and LOANDEPOT INC A, you can compare the effects of market volatilities on NMI Holdings and LOANDEPOT INC 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 LOANDEPOT INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and LOANDEPOT INC.
Diversification Opportunities for NMI Holdings and LOANDEPOT INC
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between NMI and LOANDEPOT is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and LOANDEPOT INC A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOANDEPOT INC A 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 LOANDEPOT INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOANDEPOT INC A has no effect on the direction of NMI Holdings i.e., NMI Holdings and LOANDEPOT INC go up and down completely randomly.
Pair Corralation between NMI Holdings and LOANDEPOT INC
Assuming the 90 days horizon NMI Holdings is expected to generate 0.29 times more return on investment than LOANDEPOT INC. However, NMI Holdings is 3.48 times less risky than LOANDEPOT INC. It trades about 0.1 of its potential returns per unit of risk. LOANDEPOT INC A is currently generating about 0.02 per unit of risk. If you would invest 2,780 in NMI Holdings on August 27, 2024 and sell it today you would earn a total of 860.00 from holding NMI Holdings or generate 30.94% 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. LOANDEPOT INC A
Performance |
| Timeline |
| NMI Holdings |
| LOANDEPOT INC A |
NMI Holdings and LOANDEPOT INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and LOANDEPOT INC
The main advantage of trading using opposite NMI Holdings and LOANDEPOT INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, LOANDEPOT INC 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 LOANDEPOT INC will offset losses from the drop in LOANDEPOT INC's long position.| NMI Holdings vs. Aedas Homes SA | NMI Holdings vs. MTI WIRELESS EDGE | NMI Holdings vs. Spirent Communications plc | NMI Holdings vs. Citic Telecom International |
| LOANDEPOT INC vs. Superior Plus Corp | LOANDEPOT INC vs. NMI Holdings | LOANDEPOT INC vs. Origin Agritech | LOANDEPOT INC vs. SIVERS SEMICONDUCTORS AB |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 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 | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |