Correlation Between NMI Holdings and Ontex Group
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Ontex 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 Ontex 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 Ontex Group NV, you can compare the effects of market volatilities on NMI Holdings and Ontex 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 Ontex Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Ontex Group.
Diversification Opportunities for NMI Holdings and Ontex Group
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NMI and Ontex is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Ontex Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ontex Group NV 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 Ontex Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ontex Group NV has no effect on the direction of NMI Holdings i.e., NMI Holdings and Ontex Group go up and down completely randomly.
Pair Corralation between NMI Holdings and Ontex Group
Assuming the 90 days horizon NMI Holdings is expected to generate 0.96 times more return on investment than Ontex Group. However, NMI Holdings is 1.04 times less risky than Ontex Group. It trades about 0.11 of its potential returns per unit of risk. Ontex Group NV is currently generating about -0.05 per unit of risk. If you would invest 3,060 in NMI Holdings on August 30, 2024 and sell it today you would earn a total of 740.00 from holding NMI Holdings or generate 24.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. Ontex Group NV
Performance |
| Timeline |
| NMI Holdings |
| Ontex Group NV |
NMI Holdings and Ontex Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Ontex Group
The main advantage of trading using opposite NMI Holdings and Ontex Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Ontex 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 Ontex Group will offset losses from the drop in Ontex Group's long position.| NMI Holdings vs. Perseus Mining Limited | NMI Holdings vs. CVW CLEANTECH INC | NMI Holdings vs. Warner Music Group | NMI Holdings vs. Tencent Music Entertainment |
| Ontex Group vs. LOral SA | Ontex Group vs. Superior Plus Corp | Ontex Group vs. NMI Holdings | Ontex Group 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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