Correlation Between AHOLD DELHAIADR16 and NMI Holdings
Can any of the company-specific risk be diversified away by investing in both AHOLD DELHAIADR16 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 AHOLD DELHAIADR16 and NMI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AHOLD DELHAIADR16 EO 25 and NMI Holdings, you can compare the effects of market volatilities on AHOLD DELHAIADR16 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 AHOLD DELHAIADR16 with a short position of NMI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AHOLD DELHAIADR16 and NMI Holdings.
Diversification Opportunities for AHOLD DELHAIADR16 and NMI Holdings
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between AHOLD and NMI is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding AHOLD DELHAIADR16 EO 25 and NMI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NMI Holdings and AHOLD DELHAIADR16 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 AHOLD DELHAIADR16 EO 25 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 AHOLD DELHAIADR16 i.e., AHOLD DELHAIADR16 and NMI Holdings go up and down completely randomly.
Pair Corralation between AHOLD DELHAIADR16 and NMI Holdings
Assuming the 90 days trading horizon AHOLD DELHAIADR16 EO 25 is expected to generate 0.46 times more return on investment than NMI Holdings. However, AHOLD DELHAIADR16 EO 25 is 2.18 times less risky than NMI Holdings. It trades about 0.29 of its potential returns per unit of risk. NMI Holdings is currently generating about 0.1 per unit of risk. If you would invest 2,980 in AHOLD DELHAIADR16 EO 25 on September 1, 2024 and sell it today you would earn a total of 220.00 from holding AHOLD DELHAIADR16 EO 25 or generate 7.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
AHOLD DELHAIADR16 EO 25 vs. NMI Holdings
Performance |
| Timeline |
| AHOLD DELHAIADR16 |
| NMI Holdings |
AHOLD DELHAIADR16 and NMI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AHOLD DELHAIADR16 and NMI Holdings
The main advantage of trading using opposite AHOLD DELHAIADR16 and NMI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AHOLD DELHAIADR16 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.| AHOLD DELHAIADR16 vs. AGF Management Limited | AHOLD DELHAIADR16 vs. Cleanaway Waste Management | AHOLD DELHAIADR16 vs. Bausch Health Companies | AHOLD DELHAIADR16 vs. Cardinal Health |
| NMI Holdings vs. KIMBALL ELECTRONICS | NMI Holdings vs. UET United Electronic | NMI Holdings vs. BYD ELECTRONIC | NMI Holdings vs. Benchmark Electronics |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |