Correlation Between Macys and NMI Holdings
Can any of the company-specific risk be diversified away by investing in both Macys 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 Macys and NMI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macys Inc and NMI Holdings, you can compare the effects of market volatilities on Macys 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 Macys with a short position of NMI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macys and NMI Holdings.
Diversification Opportunities for Macys and NMI Holdings
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Macys and NMI is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and NMI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NMI Holdings and Macys 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 Macys Inc 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 Macys i.e., Macys and NMI Holdings go up and down completely randomly.
Pair Corralation between Macys and NMI Holdings
Assuming the 90 days horizon Macys Inc is expected to under-perform the NMI Holdings. In addition to that, Macys is 1.7 times more volatile than NMI Holdings. It trades about -0.02 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 3,040 in NMI Holdings on September 3, 2024 and sell it today you would earn a total of 720.00 from holding NMI Holdings or generate 23.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macys Inc vs. NMI Holdings
Performance |
| Timeline |
| Macys Inc |
| NMI Holdings |
Macys and NMI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macys and NMI Holdings
The main advantage of trading using opposite Macys and NMI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macys 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.| Macys vs. SCANSOURCE | Macys vs. HEALTHCARE REAL A | Macys vs. SHIP HEALTHCARE HLDGINC | Macys vs. EPSILON HEALTHCARE LTD |
| NMI Holdings vs. Harmony Gold Mining | NMI Holdings vs. WT OFFSHORE | NMI Holdings vs. Luckin Coffee | NMI Holdings vs. BJs Restaurants |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |