Correlation Between NMI Holdings and Yihai International
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Yihai International 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 Yihai International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Yihai International Holding, you can compare the effects of market volatilities on NMI Holdings and Yihai International 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 Yihai International. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Yihai International.
Diversification Opportunities for NMI Holdings and Yihai International
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between NMI and Yihai is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Yihai International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yihai International 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 Yihai International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yihai International has no effect on the direction of NMI Holdings i.e., NMI Holdings and Yihai International go up and down completely randomly.
Pair Corralation between NMI Holdings and Yihai International
Assuming the 90 days horizon NMI Holdings is expected to generate 0.57 times more return on investment than Yihai International. However, NMI Holdings is 1.74 times less risky than Yihai International. It trades about -0.12 of its potential returns per unit of risk. Yihai International Holding is currently generating about -0.26 per unit of risk. If you would invest 3,540 in NMI Holdings on October 11, 2024 and sell it today you would lose (140.00) from holding NMI Holdings or give up 3.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NMI Holdings vs. Yihai International Holding
Performance |
| Timeline |
| NMI Holdings |
| Yihai International |
NMI Holdings and Yihai International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NMI Holdings and Yihai International
The main advantage of trading using opposite NMI Holdings and Yihai International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Yihai International 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 Yihai International will offset losses from the drop in Yihai International's long position.| NMI Holdings vs. STMicroelectronics NV | NMI Holdings vs. Shenzhen Investment Limited | NMI Holdings vs. ECHO INVESTMENT ZY | NMI Holdings vs. ARROW ELECTRONICS |
| Yihai International vs. COFCO Joycome Foods | Yihai International vs. SENECA FOODS A | Yihai International vs. MCEWEN MINING INC | Yihai International vs. EBRO FOODS |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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