Correlation Between NMI Holdings and Realty Income
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Realty Income 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 Realty Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Realty Income, you can compare the effects of market volatilities on NMI Holdings and Realty Income 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 Realty Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Realty Income.
Diversification Opportunities for NMI Holdings and Realty Income
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NMI and Realty is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Realty Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realty Income 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 Realty Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realty Income has no effect on the direction of NMI Holdings i.e., NMI Holdings and Realty Income go up and down completely randomly.
Pair Corralation between NMI Holdings and Realty Income
Assuming the 90 days horizon NMI Holdings is expected to generate 1.38 times more return on investment than Realty Income. However, NMI Holdings is 1.38 times more volatile than Realty Income. It trades about 0.09 of its potential returns per unit of risk. Realty Income is currently generating about 0.01 per unit of risk. If you would invest 1,930 in NMI Holdings on September 12, 2024 and sell it today you would earn a total of 1,770 from holding NMI Holdings or generate 91.71% 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. Realty Income
Performance |
| Timeline |
| NMI Holdings |
| Realty Income |
NMI Holdings and Realty Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Realty Income
The main advantage of trading using opposite NMI Holdings and Realty Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Realty Income 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 Realty Income will offset losses from the drop in Realty Income's long position.| NMI Holdings vs. Nufarm Limited | NMI Holdings vs. AVITA Medical | NMI Holdings vs. Sterling Construction | NMI Holdings vs. Avanos Medical |
| Realty Income vs. Vicinity Centres | Realty Income vs. Superior Plus Corp | Realty Income vs. NMI Holdings | Realty Income 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |