Correlation Between NMI Holdings and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and NTG Nordic 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 NTG Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and NTG Nordic Transport, you can compare the effects of market volatilities on NMI Holdings and NTG Nordic 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 NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and NTG Nordic.
Diversification Opportunities for NMI Holdings and NTG Nordic
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between NMI and NTG is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and NTG Nordic Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTG Nordic Transport 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 NTG Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTG Nordic Transport has no effect on the direction of NMI Holdings i.e., NMI Holdings and NTG Nordic go up and down completely randomly.
Pair Corralation between NMI Holdings and NTG Nordic
Assuming the 90 days horizon NMI Holdings is expected to generate 1.2 times more return on investment than NTG Nordic. However, NMI Holdings is 1.2 times more volatile than NTG Nordic Transport. It trades about -0.04 of its potential returns per unit of risk. NTG Nordic Transport is currently generating about -0.05 per unit of risk. If you would invest 3,640 in NMI Holdings on August 24, 2024 and sell it today you would lose (100.00) from holding NMI Holdings or give up 2.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. NTG Nordic Transport
Performance |
| Timeline |
| NMI Holdings |
| NTG Nordic Transport |
NMI Holdings and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and NTG Nordic
The main advantage of trading using opposite NMI Holdings and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, NTG Nordic 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 NTG Nordic will offset losses from the drop in NTG Nordic's long position.| NMI Holdings vs. Lion One Metals | NMI Holdings vs. Harmony Gold Mining | NMI Holdings vs. OFFICE DEPOT | NMI Holdings vs. JAPAN TOBACCO UNSPADR12 |
| NTG Nordic vs. SINGAPORE POST | NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. NMI Holdings | NTG Nordic 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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