Correlation Between NMI Holdings and WideOpenWest
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and WideOpenWest 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 WideOpenWest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and WideOpenWest, you can compare the effects of market volatilities on NMI Holdings and WideOpenWest 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 WideOpenWest. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and WideOpenWest.
Diversification Opportunities for NMI Holdings and WideOpenWest
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NMI and WideOpenWest is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and WideOpenWest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WideOpenWest 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 WideOpenWest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WideOpenWest has no effect on the direction of NMI Holdings i.e., NMI Holdings and WideOpenWest go up and down completely randomly.
Pair Corralation between NMI Holdings and WideOpenWest
Assuming the 90 days horizon NMI Holdings is expected to generate 0.36 times more return on investment than WideOpenWest. However, NMI Holdings is 2.81 times less risky than WideOpenWest. It trades about 0.09 of its potential returns per unit of risk. WideOpenWest is currently generating about 0.0 per unit of risk. If you would invest 1,900 in NMI Holdings on September 3, 2024 and sell it today you would earn a total of 1,860 from holding NMI Holdings or generate 97.89% 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. WideOpenWest
Performance |
| Timeline |
| NMI Holdings |
| WideOpenWest |
NMI Holdings and WideOpenWest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and WideOpenWest
The main advantage of trading using opposite NMI Holdings and WideOpenWest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, WideOpenWest 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 WideOpenWest will offset losses from the drop in WideOpenWest's long position.| NMI Holdings vs. Harmony Gold Mining | NMI Holdings vs. WT OFFSHORE | NMI Holdings vs. Luckin Coffee | NMI Holdings vs. BJs Restaurants |
| WideOpenWest vs. AXWAY SOFTWARE EO | WideOpenWest vs. Sqs Software Quality | WideOpenWest vs. Cogent Communications Holdings | WideOpenWest vs. Check Point Software |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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