Correlation Between NMI Holdings and Polyplex (Thailand)
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Polyplex (Thailand) 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 Polyplex (Thailand) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Polyplex Public, you can compare the effects of market volatilities on NMI Holdings and Polyplex (Thailand) 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 Polyplex (Thailand). Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Polyplex (Thailand).
Diversification Opportunities for NMI Holdings and Polyplex (Thailand)
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NMI and Polyplex is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Polyplex Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polyplex (Thailand) 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 Polyplex (Thailand). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polyplex (Thailand) has no effect on the direction of NMI Holdings i.e., NMI Holdings and Polyplex (Thailand) go up and down completely randomly.
Pair Corralation between NMI Holdings and Polyplex (Thailand)
Assuming the 90 days horizon NMI Holdings is expected to generate 68.51 times less return on investment than Polyplex (Thailand). But when comparing it to its historical volatility, NMI Holdings is 17.75 times less risky than Polyplex (Thailand). It trades about 0.06 of its potential returns per unit of risk. Polyplex Public is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Polyplex Public on September 19, 2024 and sell it today you would earn a total of 19.00 from holding Polyplex Public or generate 135.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. Polyplex Public
Performance |
| Timeline |
| NMI Holdings |
| Polyplex (Thailand) |
NMI Holdings and Polyplex (Thailand) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Polyplex (Thailand)
The main advantage of trading using opposite NMI Holdings and Polyplex (Thailand) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Polyplex (Thailand) 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 Polyplex (Thailand) will offset losses from the drop in Polyplex (Thailand)'s long position.| NMI Holdings vs. Entravision Communications | NMI Holdings vs. Highlight Communications AG | NMI Holdings vs. DIVERSIFIED ROYALTY | NMI Holdings vs. Universal Display |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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