Correlation Between NMI Holdings and Plexus Corp
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Plexus Corp 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 Plexus Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Plexus Corp, you can compare the effects of market volatilities on NMI Holdings and Plexus Corp 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 Plexus Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Plexus Corp.
Diversification Opportunities for NMI Holdings and Plexus Corp
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NMI and Plexus is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Plexus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plexus Corp 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 Plexus Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plexus Corp has no effect on the direction of NMI Holdings i.e., NMI Holdings and Plexus Corp go up and down completely randomly.
Pair Corralation between NMI Holdings and Plexus Corp
Assuming the 90 days horizon NMI Holdings is expected to generate 0.93 times more return on investment than Plexus Corp. However, NMI Holdings is 1.07 times less risky than Plexus Corp. It trades about -0.09 of its potential returns per unit of risk. Plexus Corp is currently generating about -0.16 per unit of risk. If you would invest 3,760 in NMI Holdings on November 29, 2024 and sell it today you would lose (340.00) from holding NMI Holdings or give up 9.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.33% |
| Values | Daily Returns |
NMI Holdings vs. Plexus Corp
Performance |
| Timeline |
| NMI Holdings |
| Plexus Corp |
NMI Holdings and Plexus Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Plexus Corp
The main advantage of trading using opposite NMI Holdings and Plexus Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Plexus Corp 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 Plexus Corp will offset losses from the drop in Plexus Corp's long position.| NMI Holdings vs. CanSino Biologics | NMI Holdings vs. MOLSON RS BEVERAGE | NMI Holdings vs. Vulcan Materials | NMI Holdings vs. China Resources Beer |
| Plexus Corp vs. SCANSOURCE | Plexus Corp vs. COMBA TELECOM SYST | Plexus Corp vs. CITIC Telecom International | Plexus Corp vs. ALBIS LEASING AG |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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