Correlation Between Ming Le and NMI Holdings
Can any of the company-specific risk be diversified away by investing in both Ming Le 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 Ming Le and NMI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ming Le Sports and NMI Holdings, you can compare the effects of market volatilities on Ming Le 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 Ming Le with a short position of NMI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ming Le and NMI Holdings.
Diversification Opportunities for Ming Le and NMI Holdings
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ming and NMI is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ming Le Sports and NMI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NMI Holdings and Ming Le 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 Ming Le Sports 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 Ming Le i.e., Ming Le and NMI Holdings go up and down completely randomly.
Pair Corralation between Ming Le and NMI Holdings
Assuming the 90 days trading horizon Ming Le Sports is expected to generate 2.59 times more return on investment than NMI Holdings. However, Ming Le is 2.59 times more volatile than NMI Holdings. It trades about 0.12 of its potential returns per unit of risk. NMI Holdings is currently generating about 0.01 per unit of risk. If you would invest 109.00 in Ming Le Sports on August 25, 2024 and sell it today you would earn a total of 37.00 from holding Ming Le Sports or generate 33.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ming Le Sports vs. NMI Holdings
Performance |
| Timeline |
| Ming Le Sports |
| NMI Holdings |
Ming Le and NMI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ming Le and NMI Holdings
The main advantage of trading using opposite Ming Le and NMI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ming Le 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.The idea behind Ming Le Sports and NMI Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| NMI Holdings vs. USWE SPORTS AB | NMI Holdings vs. GungHo Online Entertainment | NMI Holdings vs. Ming Le Sports | NMI Holdings vs. DICKS Sporting Goods |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |