Correlation Between NMI Holdings and Sydbank A/S
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Sydbank A/S 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 Sydbank A/S into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Sydbank AS, you can compare the effects of market volatilities on NMI Holdings and Sydbank A/S 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 Sydbank A/S. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Sydbank A/S.
Diversification Opportunities for NMI Holdings and Sydbank A/S
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NMI and Sydbank is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Sydbank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank A/S 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 Sydbank A/S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sydbank A/S has no effect on the direction of NMI Holdings i.e., NMI Holdings and Sydbank A/S go up and down completely randomly.
Pair Corralation between NMI Holdings and Sydbank A/S
Assuming the 90 days horizon NMI Holdings is expected to generate 2.64 times less return on investment than Sydbank A/S. But when comparing it to its historical volatility, NMI Holdings is 4.1 times less risky than Sydbank A/S. It trades about 0.1 of its potential returns per unit of risk. Sydbank AS is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,583 in Sydbank AS on August 29, 2024 and sell it today you would earn a total of 3,049 from holding Sydbank AS or generate 192.61% 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. Sydbank AS
Performance |
| Timeline |
| NMI Holdings |
| Sydbank A/S |
NMI Holdings and Sydbank A/S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Sydbank A/S
The main advantage of trading using opposite NMI Holdings and Sydbank A/S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Sydbank A/S 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 Sydbank A/S will offset losses from the drop in Sydbank A/S's 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 |
| Sydbank A/S vs. Deutsche Bank Aktiengesellschaft | Sydbank A/S vs. Superior Plus Corp | Sydbank A/S vs. NMI Holdings | Sydbank A/S vs. Origin Agritech |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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