Correlation Between Kering SA and NMI Holdings
Can any of the company-specific risk be diversified away by investing in both Kering SA 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 Kering SA and NMI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kering SA and NMI Holdings, you can compare the effects of market volatilities on Kering SA 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 Kering SA with a short position of NMI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kering SA and NMI Holdings.
Diversification Opportunities for Kering SA and NMI Holdings
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kering and NMI is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Kering SA and NMI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NMI Holdings and Kering SA 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 Kering SA 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 Kering SA i.e., Kering SA and NMI Holdings go up and down completely randomly.
Pair Corralation between Kering SA and NMI Holdings
Assuming the 90 days horizon Kering SA is expected to under-perform the NMI Holdings. In addition to that, Kering SA is 1.51 times more volatile than NMI Holdings. It trades about -0.07 of its total potential returns per unit of risk. NMI Holdings is currently generating about 0.27 per unit of volatility. If you would invest 3,360 in NMI Holdings on September 3, 2024 and sell it today you would earn a total of 400.00 from holding NMI Holdings or generate 11.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kering SA vs. NMI Holdings
Performance |
| Timeline |
| Kering SA |
| NMI Holdings |
Kering SA and NMI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kering SA and NMI Holdings
The main advantage of trading using opposite Kering SA and NMI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kering SA 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.| Kering SA vs. Goosehead Insurance | Kering SA vs. CSSC Offshore Marine | Kering SA vs. LIFENET INSURANCE CO | Kering SA vs. BW OFFSHORE 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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