Correlation Between NMI Holdings and Vanguard FTSE
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By analyzing existing cross correlation between NMI Holdings and Vanguard FTSE Developed, you can compare the effects of market volatilities on NMI Holdings and Vanguard FTSE 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 Vanguard FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Vanguard FTSE.
Diversification Opportunities for NMI Holdings and Vanguard FTSE
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NMI and Vanguard is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Vanguard FTSE Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard FTSE Developed 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 Vanguard FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard FTSE Developed has no effect on the direction of NMI Holdings i.e., NMI Holdings and Vanguard FTSE go up and down completely randomly.
Pair Corralation between NMI Holdings and Vanguard FTSE
Assuming the 90 days horizon NMI Holdings is expected to generate 2.19 times more return on investment than Vanguard FTSE. However, NMI Holdings is 2.19 times more volatile than Vanguard FTSE Developed. It trades about 0.1 of its potential returns per unit of risk. Vanguard FTSE Developed is currently generating about 0.05 per unit of risk. If you would invest 1,880 in NMI Holdings on August 31, 2024 and sell it today you would earn a total of 1,900 from holding NMI Holdings or generate 101.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. Vanguard FTSE Developed
Performance |
| Timeline |
| NMI Holdings |
| Vanguard FTSE Developed |
NMI Holdings and Vanguard FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Vanguard FTSE
The main advantage of trading using opposite NMI Holdings and Vanguard FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Vanguard FTSE 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 Vanguard FTSE will offset losses from the drop in Vanguard FTSE's long position.| NMI Holdings vs. Iridium Communications | NMI Holdings vs. BOS BETTER ONLINE | NMI Holdings vs. Verizon Communications | NMI Holdings vs. Singapore Telecommunications Limited |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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