Correlation Between Valneva SE and NMI Holdings
Can any of the company-specific risk be diversified away by investing in both Valneva SE 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 Valneva SE and NMI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valneva SE and NMI Holdings, you can compare the effects of market volatilities on Valneva SE 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 Valneva SE with a short position of NMI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and NMI Holdings.
Diversification Opportunities for Valneva SE and NMI Holdings
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Valneva and NMI is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE and NMI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NMI Holdings and Valneva SE 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 Valneva SE 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 Valneva SE i.e., Valneva SE and NMI Holdings go up and down completely randomly.
Pair Corralation between Valneva SE and NMI Holdings
Assuming the 90 days horizon Valneva SE is expected to under-perform the NMI Holdings. In addition to that, Valneva SE is 1.06 times more volatile than NMI Holdings. It trades about -0.56 of its total potential returns per unit of risk. NMI Holdings is currently generating about 0.11 per unit of volatility. If you would invest 3,580 in NMI Holdings on September 1, 2024 and sell it today you would earn a total of 200.00 from holding NMI Holdings or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valneva SE vs. NMI Holdings
Performance |
| Timeline |
| Valneva SE |
| NMI Holdings |
Valneva SE and NMI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valneva SE and NMI Holdings
The main advantage of trading using opposite Valneva SE and NMI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE 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.| Valneva SE vs. Apollo Investment Corp | Valneva SE vs. LPKF Laser Electronics | Valneva SE vs. PennyMac Mortgage Investment | Valneva SE vs. BYD ELECTRONIC |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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