Correlation Between NMI Holdings and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Perseus Mining 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 Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Perseus Mining Limited, you can compare the effects of market volatilities on NMI Holdings and Perseus Mining 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 Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Perseus Mining.
Diversification Opportunities for NMI Holdings and Perseus Mining
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NMI and Perseus is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining 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 Perseus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perseus Mining has no effect on the direction of NMI Holdings i.e., NMI Holdings and Perseus Mining go up and down completely randomly.
Pair Corralation between NMI Holdings and Perseus Mining
Assuming the 90 days horizon NMI Holdings is expected to generate 0.53 times more return on investment than Perseus Mining. However, NMI Holdings is 1.9 times less risky than Perseus Mining. It trades about 0.1 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about 0.03 per unit of risk. If you would invest 2,140 in NMI Holdings on August 29, 2024 and sell it today you would earn a total of 1,500 from holding NMI Holdings or generate 70.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. Perseus Mining Limited
Performance |
| Timeline |
| NMI Holdings |
| Perseus Mining |
NMI Holdings and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Perseus Mining
The main advantage of trading using opposite NMI Holdings and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Perseus Mining 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 Perseus Mining will offset losses from the drop in Perseus Mining's long position.| NMI Holdings vs. CSSC Offshore Marine | NMI Holdings vs. SIEM OFFSHORE NEW | NMI Holdings vs. PARKEN Sport Entertainment | NMI Holdings vs. SK TELECOM TDADR |
| Perseus Mining vs. Franco Nevada | Perseus Mining vs. Agnico Eagle Mines | Perseus Mining vs. Superior Plus Corp | Perseus Mining vs. NMI Holdings |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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