Correlation Between NMI Holdings and Marubeni
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Marubeni 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 Marubeni into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Marubeni, you can compare the effects of market volatilities on NMI Holdings and Marubeni 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 Marubeni. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Marubeni.
Diversification Opportunities for NMI Holdings and Marubeni
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NMI and Marubeni is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Marubeni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marubeni 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 Marubeni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marubeni has no effect on the direction of NMI Holdings i.e., NMI Holdings and Marubeni go up and down completely randomly.
Pair Corralation between NMI Holdings and Marubeni
Assuming the 90 days horizon NMI Holdings is expected to generate 0.67 times more return on investment than Marubeni. However, NMI Holdings is 1.49 times less risky than Marubeni. It trades about 0.09 of its potential returns per unit of risk. Marubeni is currently generating about 0.0 per unit of risk. If you would invest 2,420 in NMI Holdings on September 1, 2024 and sell it today you would earn a total of 1,360 from holding NMI Holdings or generate 56.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
NMI Holdings vs. Marubeni
Performance |
| Timeline |
| NMI Holdings |
| Marubeni |
NMI Holdings and Marubeni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Marubeni
The main advantage of trading using opposite NMI Holdings and Marubeni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Marubeni 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 Marubeni will offset losses from the drop in Marubeni's long position.| NMI Holdings vs. KIMBALL ELECTRONICS | NMI Holdings vs. UET United Electronic | NMI Holdings vs. BYD ELECTRONIC | NMI Holdings vs. Benchmark Electronics |
| Marubeni vs. New Residential Investment | Marubeni vs. TROPHY GAMES DEV | Marubeni vs. OURGAME INTHOLDL 00005 | Marubeni vs. WisdomTree Investments |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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