Correlation Between Lakeland Industries and NMI Holdings
Can any of the company-specific risk be diversified away by investing in both Lakeland Industries 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 Lakeland Industries and NMI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lakeland Industries and NMI Holdings, you can compare the effects of market volatilities on Lakeland Industries 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 Lakeland Industries with a short position of NMI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lakeland Industries and NMI Holdings.
Diversification Opportunities for Lakeland Industries and NMI Holdings
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lakeland and NMI is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lakeland Industries and NMI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NMI Holdings and Lakeland Industries 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 Lakeland Industries 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 Lakeland Industries i.e., Lakeland Industries and NMI Holdings go up and down completely randomly.
Pair Corralation between Lakeland Industries and NMI Holdings
Assuming the 90 days horizon Lakeland Industries is expected to under-perform the NMI Holdings. In addition to that, Lakeland Industries is 1.79 times more volatile than NMI Holdings. It trades about -0.28 of its total potential returns per unit of risk. NMI Holdings is currently generating about -0.4 per unit of volatility. If you would invest 3,740 in NMI Holdings on December 8, 2024 and sell it today you would lose (480.00) from holding NMI Holdings or give up 12.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lakeland Industries vs. NMI Holdings
Performance |
| Timeline |
| Lakeland Industries |
| NMI Holdings |
Lakeland Industries and NMI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lakeland Industries and NMI Holdings
The main advantage of trading using opposite Lakeland Industries and NMI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lakeland Industries 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.| Lakeland Industries vs. VIENNA INSURANCE GR | Lakeland Industries vs. Zurich Insurance Group | Lakeland Industries vs. BJs Restaurants | Lakeland Industries vs. Ping An Insurance |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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