Correlation Between AGRICULTBK HADR/25 and NMI Holdings
Can any of the company-specific risk be diversified away by investing in both AGRICULTBK HADR/25 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 AGRICULTBK HADR/25 and NMI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGRICULTBK HADR25 YC and NMI Holdings, you can compare the effects of market volatilities on AGRICULTBK HADR/25 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 AGRICULTBK HADR/25 with a short position of NMI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICULTBK HADR/25 and NMI Holdings.
Diversification Opportunities for AGRICULTBK HADR/25 and NMI Holdings
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AGRICULTBK and NMI is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding AGRICULTBK HADR25 YC and NMI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NMI Holdings and AGRICULTBK HADR/25 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 AGRICULTBK HADR25 YC 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 AGRICULTBK HADR/25 i.e., AGRICULTBK HADR/25 and NMI Holdings go up and down completely randomly.
Pair Corralation between AGRICULTBK HADR/25 and NMI Holdings
Assuming the 90 days trading horizon AGRICULTBK HADR/25 is expected to generate 1.92 times less return on investment than NMI Holdings. But when comparing it to its historical volatility, AGRICULTBK HADR25 YC is 1.41 times less risky than NMI Holdings. It trades about 0.03 of its potential returns per unit of risk. NMI Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,580 in NMI Holdings on August 28, 2024 and sell it today you would earn a total of 60.00 from holding NMI Holdings or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGRICULTBK HADR25 YC vs. NMI Holdings
Performance |
| Timeline |
| AGRICULTBK HADR/25 |
| NMI Holdings |
AGRICULTBK HADR/25 and NMI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICULTBK HADR/25 and NMI Holdings
The main advantage of trading using opposite AGRICULTBK HADR/25 and NMI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICULTBK HADR/25 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.| AGRICULTBK HADR/25 vs. The Toronto Dominion Bank | AGRICULTBK HADR/25 vs. Superior Plus Corp | AGRICULTBK HADR/25 vs. NMI Holdings | AGRICULTBK HADR/25 vs. Origin Agritech |
| NMI Holdings vs. Lion Biotechnologies | NMI Holdings vs. Digilife Technologies Limited | NMI Holdings vs. Food Life Companies | NMI Holdings vs. CONAGRA 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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