Correlation Between Boston Beer and NMI Holdings
Can any of the company-specific risk be diversified away by investing in both Boston Beer 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 Boston Beer and NMI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boston Beer and NMI Holdings, you can compare the effects of market volatilities on Boston Beer 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 Boston Beer with a short position of NMI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and NMI Holdings.
Diversification Opportunities for Boston Beer and NMI Holdings
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boston and NMI is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding The Boston Beer and NMI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NMI Holdings and Boston Beer 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 The Boston Beer 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 Boston Beer i.e., Boston Beer and NMI Holdings go up and down completely randomly.
Pair Corralation between Boston Beer and NMI Holdings
Assuming the 90 days trading horizon The Boston Beer is expected to generate 0.59 times more return on investment than NMI Holdings. However, The Boston Beer is 1.71 times less risky than NMI Holdings. It trades about 0.31 of its potential returns per unit of risk. NMI Holdings is currently generating about 0.13 per unit of risk. If you would invest 27,040 in The Boston Beer on September 2, 2024 and sell it today you would earn a total of 2,640 from holding The Boston Beer or generate 9.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Boston Beer vs. NMI Holdings
Performance |
| Timeline |
| Boston Beer |
| NMI Holdings |
Boston Beer and NMI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and NMI Holdings
The main advantage of trading using opposite Boston Beer and NMI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer 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.| Boston Beer vs. Heineken Holding NV | Boston Beer vs. Superior Plus Corp | Boston Beer vs. NMI Holdings | Boston Beer vs. Origin Agritech |
| NMI Holdings vs. Taylor Morrison Home | NMI Holdings vs. ATRYS HEALTH SA | NMI Holdings vs. National Health Investors | NMI Holdings vs. Bumrungrad Hospital Public |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| CEOs Directory Screen CEOs from public companies around the world | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |