Correlation Between NMI Holdings and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Solstad Offshore 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 Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Solstad Offshore ASA, you can compare the effects of market volatilities on NMI Holdings and Solstad Offshore 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 Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Solstad Offshore.
Diversification Opportunities for NMI Holdings and Solstad Offshore
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between NMI and Solstad is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Solstad Offshore ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solstad Offshore ASA 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 Solstad Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solstad Offshore ASA has no effect on the direction of NMI Holdings i.e., NMI Holdings and Solstad Offshore go up and down completely randomly.
Pair Corralation between NMI Holdings and Solstad Offshore
Assuming the 90 days horizon NMI Holdings is expected to under-perform the Solstad Offshore. In addition to that, NMI Holdings is 1.23 times more volatile than Solstad Offshore ASA. It trades about -0.05 of its total potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.27 per unit of volatility. If you would invest 252.00 in Solstad Offshore ASA on August 25, 2024 and sell it today you would earn a total of 30.00 from holding Solstad Offshore ASA or generate 11.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
NMI Holdings vs. Solstad Offshore ASA
Performance |
| Timeline |
| NMI Holdings |
| Solstad Offshore ASA |
NMI Holdings and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Solstad Offshore
The main advantage of trading using opposite NMI Holdings and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Solstad Offshore 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 Solstad Offshore will offset losses from the drop in Solstad Offshore's long position.| NMI Holdings vs. USWE SPORTS AB | NMI Holdings vs. GungHo Online Entertainment | NMI Holdings vs. Ming Le Sports | NMI Holdings vs. DICKS Sporting Goods |
| Solstad Offshore vs. Superior Plus Corp | Solstad Offshore vs. NMI Holdings | Solstad Offshore vs. Origin Agritech | Solstad Offshore 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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