Correlation Between NMI Holdings and Wheaton Precious
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Wheaton Precious 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 Wheaton Precious into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Wheaton Precious Metals, you can compare the effects of market volatilities on NMI Holdings and Wheaton Precious 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 Wheaton Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Wheaton Precious.
Diversification Opportunities for NMI Holdings and Wheaton Precious
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NMI and Wheaton is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Wheaton Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wheaton Precious Metals 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 Wheaton Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wheaton Precious Metals has no effect on the direction of NMI Holdings i.e., NMI Holdings and Wheaton Precious go up and down completely randomly.
Pair Corralation between NMI Holdings and Wheaton Precious
Assuming the 90 days horizon NMI Holdings is expected to generate 11.03 times less return on investment than Wheaton Precious. In addition to that, NMI Holdings is 1.08 times more volatile than Wheaton Precious Metals. It trades about 0.01 of its total potential returns per unit of risk. Wheaton Precious Metals is currently generating about 0.11 per unit of volatility. If you would invest 5,645 in Wheaton Precious Metals on August 28, 2024 and sell it today you would earn a total of 415.00 from holding Wheaton Precious Metals or generate 7.35% 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. Wheaton Precious Metals
Performance |
| Timeline |
| NMI Holdings |
| Wheaton Precious Metals |
NMI Holdings and Wheaton Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Wheaton Precious
The main advantage of trading using opposite NMI Holdings and Wheaton Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Wheaton Precious 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 Wheaton Precious will offset losses from the drop in Wheaton Precious' long position.| NMI Holdings vs. CSSC Offshore Marine | NMI Holdings vs. SIEM OFFSHORE NEW | NMI Holdings vs. PARKEN Sport Entertainment | NMI Holdings vs. SK TELECOM TDADR |
| Wheaton Precious vs. Franco Nevada | Wheaton Precious vs. Agnico Eagle Mines | Wheaton Precious vs. Superior Plus Corp | Wheaton Precious vs. NMI Holdings |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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