Correlation Between NMI Holdings and PLDT
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and PLDT 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 PLDT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and PLDT Inc, you can compare the effects of market volatilities on NMI Holdings and PLDT 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 PLDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and PLDT.
Diversification Opportunities for NMI Holdings and PLDT
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between NMI and PLDT is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and PLDT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLDT Inc 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 PLDT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLDT Inc has no effect on the direction of NMI Holdings i.e., NMI Holdings and PLDT go up and down completely randomly.
Pair Corralation between NMI Holdings and PLDT
Assuming the 90 days horizon NMI Holdings is expected to under-perform the PLDT. In addition to that, NMI Holdings is 1.28 times more volatile than PLDT Inc. It trades about -0.14 of its total potential returns per unit of risk. PLDT Inc is currently generating about 0.09 per unit of volatility. If you would invest 2,080 in PLDT Inc on October 11, 2024 and sell it today you would earn a total of 40.00 from holding PLDT Inc or generate 1.92% 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. PLDT Inc
Performance |
| Timeline |
| NMI Holdings |
| PLDT Inc |
NMI Holdings and PLDT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and PLDT
The main advantage of trading using opposite NMI Holdings and PLDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, PLDT 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 PLDT will offset losses from the drop in PLDT's long position.| NMI Holdings vs. STMicroelectronics NV | NMI Holdings vs. Shenzhen Investment Limited | NMI Holdings vs. ECHO INVESTMENT ZY | NMI Holdings vs. ARROW ELECTRONICS |
| PLDT vs. Nippon Telegraph and | PLDT vs. Superior Plus Corp | PLDT vs. NMI Holdings | PLDT vs. SIVERS SEMICONDUCTORS AB |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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