Correlation Between AM EAGLE and NMI Holdings
Can any of the company-specific risk be diversified away by investing in both AM EAGLE and NMI Holdings 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 AM EAGLE and NMI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AM EAGLE OUTFITTERS and NMI Holdings, you can compare the effects of market volatilities on AM EAGLE and NMI Holdings 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 AM EAGLE with a short position of NMI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AM EAGLE and NMI Holdings.
Diversification Opportunities for AM EAGLE and NMI Holdings
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AFG and NMI is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding AM EAGLE OUTFITTERS and NMI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NMI Holdings and AM EAGLE 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 AM EAGLE OUTFITTERS are associated (or correlated) with NMI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NMI Holdings has no effect on the direction of AM EAGLE i.e., AM EAGLE and NMI Holdings go up and down completely randomly.
Pair Corralation between AM EAGLE and NMI Holdings
Assuming the 90 days trading horizon AM EAGLE OUTFITTERS is expected to generate 1.55 times more return on investment than NMI Holdings. However, AM EAGLE is 1.55 times more volatile than NMI Holdings. It trades about -0.03 of its potential returns per unit of risk. NMI Holdings is currently generating about -0.2 per unit of risk. If you would invest 1,607 in AM EAGLE OUTFITTERS on October 18, 2024 and sell it today you would lose (27.00) from holding AM EAGLE OUTFITTERS or give up 1.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AM EAGLE OUTFITTERS vs. NMI Holdings
Performance |
| Timeline |
| AM EAGLE OUTFITTERS |
| NMI Holdings |
AM EAGLE and NMI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AM EAGLE and NMI Holdings
The main advantage of trading using opposite AM EAGLE and NMI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AM EAGLE position performs unexpectedly, NMI Holdings 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 NMI Holdings will offset losses from the drop in NMI Holdings' long position.| AM EAGLE vs. INFORMATION SVC GRP | AM EAGLE vs. IMAGIN MEDICAL INC | AM EAGLE vs. Thai Beverage Public | AM EAGLE vs. Algonquin Power Utilities |
| NMI Holdings vs. SOGECLAIR SA INH | NMI Holdings vs. CLOVER HEALTH INV | NMI Holdings vs. RCI Hospitality Holdings | NMI Holdings vs. AM EAGLE OUTFITTERS |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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