Correlation Between NMI Holdings and Saputo
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Saputo 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 Saputo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Saputo Inc, you can compare the effects of market volatilities on NMI Holdings and Saputo 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 Saputo. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Saputo.
Diversification Opportunities for NMI Holdings and Saputo
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NMI and Saputo is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Saputo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saputo 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 Saputo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saputo Inc has no effect on the direction of NMI Holdings i.e., NMI Holdings and Saputo go up and down completely randomly.
Pair Corralation between NMI Holdings and Saputo
Assuming the 90 days horizon NMI Holdings is expected to generate 1.18 times more return on investment than Saputo. However, NMI Holdings is 1.18 times more volatile than Saputo Inc. It trades about 0.11 of its potential returns per unit of risk. Saputo Inc is currently generating about -0.02 per unit of risk. If you would invest 3,040 in NMI Holdings on September 3, 2024 and sell it today you would earn a total of 720.00 from holding NMI Holdings or generate 23.68% 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. Saputo Inc
Performance |
| Timeline |
| NMI Holdings |
| Saputo Inc |
NMI Holdings and Saputo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Saputo
The main advantage of trading using opposite NMI Holdings and Saputo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Saputo 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 Saputo will offset losses from the drop in Saputo's long position.| NMI Holdings vs. Harmony Gold Mining | NMI Holdings vs. WT OFFSHORE | NMI Holdings vs. Luckin Coffee | NMI Holdings vs. BJs Restaurants |
| Saputo vs. STMicroelectronics NV | Saputo vs. UMC Electronics Co | Saputo vs. AIR PRODCHEMICALS | Saputo vs. GRIFFIN MINING LTD |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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