Correlation Between NMI Holdings and Sinopharm Group
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Sinopharm Group 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 Sinopharm Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Sinopharm Group Co, you can compare the effects of market volatilities on NMI Holdings and Sinopharm Group 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 Sinopharm Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Sinopharm Group.
Diversification Opportunities for NMI Holdings and Sinopharm Group
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between NMI and Sinopharm is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Sinopharm Group Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopharm Group 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 Sinopharm Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopharm Group has no effect on the direction of NMI Holdings i.e., NMI Holdings and Sinopharm Group go up and down completely randomly.
Pair Corralation between NMI Holdings and Sinopharm Group
Assuming the 90 days horizon NMI Holdings is expected to generate 9.13 times less return on investment than Sinopharm Group. But when comparing it to its historical volatility, NMI Holdings is 1.6 times less risky than Sinopharm Group. It trades about 0.02 of its potential returns per unit of risk. Sinopharm Group Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 202.00 in Sinopharm Group Co on August 28, 2024 and sell it today you would earn a total of 48.00 from holding Sinopharm Group Co or generate 23.76% 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. Sinopharm Group Co
Performance |
| Timeline |
| NMI Holdings |
| Sinopharm Group |
NMI Holdings and Sinopharm Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Sinopharm Group
The main advantage of trading using opposite NMI Holdings and Sinopharm Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Sinopharm Group 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 Sinopharm Group will offset losses from the drop in Sinopharm Group'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 |
| Sinopharm Group vs. CarsalesCom | Sinopharm Group vs. FUTURE GAMING GRP | Sinopharm Group vs. HOCHSCHILD MINING | Sinopharm Group vs. Globe Trade Centre |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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