Correlation Between SIEM OFFSHORE and NMI Holdings
Can any of the company-specific risk be diversified away by investing in both SIEM OFFSHORE 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 SIEM OFFSHORE and NMI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIEM OFFSHORE NEW and NMI Holdings, you can compare the effects of market volatilities on SIEM OFFSHORE 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 SIEM OFFSHORE with a short position of NMI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIEM OFFSHORE and NMI Holdings.
Diversification Opportunities for SIEM OFFSHORE and NMI Holdings
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between SIEM and NMI is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding SIEM OFFSHORE NEW and NMI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NMI Holdings and SIEM OFFSHORE 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 SIEM OFFSHORE NEW 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 SIEM OFFSHORE i.e., SIEM OFFSHORE and NMI Holdings go up and down completely randomly.
Pair Corralation between SIEM OFFSHORE and NMI Holdings
Assuming the 90 days trading horizon SIEM OFFSHORE is expected to generate 1.05 times less return on investment than NMI Holdings. In addition to that, SIEM OFFSHORE is 2.08 times more volatile than NMI Holdings. It trades about 0.04 of its total potential returns per unit of risk. NMI Holdings is currently generating about 0.09 per unit of volatility. If you would invest 2,460 in NMI Holdings on August 31, 2024 and sell it today you would earn a total of 1,320 from holding NMI Holdings or generate 53.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
SIEM OFFSHORE NEW vs. NMI Holdings
Performance |
| Timeline |
| SIEM OFFSHORE NEW |
| NMI Holdings |
SIEM OFFSHORE and NMI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIEM OFFSHORE and NMI Holdings
The main advantage of trading using opposite SIEM OFFSHORE and NMI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIEM OFFSHORE 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.| SIEM OFFSHORE vs. Superior Plus Corp | SIEM OFFSHORE vs. NMI Holdings | SIEM OFFSHORE vs. Origin Agritech | SIEM OFFSHORE vs. SIVERS SEMICONDUCTORS AB |
| NMI Holdings vs. Iridium Communications | NMI Holdings vs. BOS BETTER ONLINE | NMI Holdings vs. Verizon Communications | NMI Holdings vs. Singapore Telecommunications Limited |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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