Correlation Between NMI Holdings and Wabash National
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Wabash National 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 Wabash National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Wabash National, you can compare the effects of market volatilities on NMI Holdings and Wabash National 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 Wabash National. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Wabash National.
Diversification Opportunities for NMI Holdings and Wabash National
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between NMI and Wabash is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Wabash National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wabash National 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 Wabash National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wabash National has no effect on the direction of NMI Holdings i.e., NMI Holdings and Wabash National go up and down completely randomly.
Pair Corralation between NMI Holdings and Wabash National
Assuming the 90 days horizon NMI Holdings is expected to generate 2.02 times less return on investment than Wabash National. In addition to that, NMI Holdings is 1.04 times more volatile than Wabash National. It trades about 0.11 of its total potential returns per unit of risk. Wabash National is currently generating about 0.24 per unit of volatility. If you would invest 1,620 in Wabash National on September 1, 2024 and sell it today you would earn a total of 210.00 from holding Wabash National or generate 12.96% 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. Wabash National
Performance |
| Timeline |
| NMI Holdings |
| Wabash National |
NMI Holdings and Wabash National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Wabash National
The main advantage of trading using opposite NMI Holdings and Wabash National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Wabash National 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 Wabash National will offset losses from the drop in Wabash National's long position.| NMI Holdings vs. KIMBALL ELECTRONICS | NMI Holdings vs. UET United Electronic | NMI Holdings vs. BYD ELECTRONIC | NMI Holdings vs. Benchmark Electronics |
| Wabash National vs. Superior Plus Corp | Wabash National vs. NMI Holdings | Wabash National vs. Origin Agritech | Wabash National 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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