Correlation Between NMI Holdings and SIEMENS AG
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and SIEMENS AG 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 SIEMENS AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and SIEMENS AG SP, you can compare the effects of market volatilities on NMI Holdings and SIEMENS AG 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 SIEMENS AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and SIEMENS AG.
Diversification Opportunities for NMI Holdings and SIEMENS AG
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between NMI and SIEMENS is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and SIEMENS AG SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIEMENS AG SP 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 SIEMENS AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIEMENS AG SP has no effect on the direction of NMI Holdings i.e., NMI Holdings and SIEMENS AG go up and down completely randomly.
Pair Corralation between NMI Holdings and SIEMENS AG
Assuming the 90 days horizon NMI Holdings is expected to generate 0.95 times more return on investment than SIEMENS AG. However, NMI Holdings is 1.05 times less risky than SIEMENS AG. It trades about 0.08 of its potential returns per unit of risk. SIEMENS AG SP is currently generating about 0.04 per unit of risk. If you would invest 2,940 in NMI Holdings on August 29, 2024 and sell it today you would earn a total of 740.00 from holding NMI Holdings or generate 25.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. SIEMENS AG SP
Performance |
| Timeline |
| NMI Holdings |
| SIEMENS AG SP |
NMI Holdings and SIEMENS AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and SIEMENS AG
The main advantage of trading using opposite NMI Holdings and SIEMENS AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, SIEMENS AG 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 SIEMENS AG will offset losses from the drop in SIEMENS AG's long position.| NMI Holdings vs. Boyd Gaming | NMI Holdings vs. SEI INVESTMENTS | NMI Holdings vs. HK Electric Investments | NMI Holdings vs. WisdomTree Investments |
| SIEMENS AG vs. Superior Plus Corp | SIEMENS AG vs. NMI Holdings | SIEMENS AG vs. SIVERS SEMICONDUCTORS AB | SIEMENS AG vs. Talanx 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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