Correlation Between Tesla and NMI Holdings
Can any of the company-specific risk be diversified away by investing in both Tesla 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 Tesla and NMI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc and NMI Holdings, you can compare the effects of market volatilities on Tesla 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 Tesla with a short position of NMI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and NMI Holdings.
Diversification Opportunities for Tesla and NMI Holdings
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tesla and NMI is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and NMI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NMI Holdings and Tesla 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 Tesla 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 Tesla i.e., Tesla and NMI Holdings go up and down completely randomly.
Pair Corralation between Tesla and NMI Holdings
Assuming the 90 days horizon Tesla Inc is expected to generate 2.28 times more return on investment than NMI Holdings. However, Tesla is 2.28 times more volatile than NMI Holdings. It trades about 0.05 of its potential returns per unit of risk. NMI Holdings is currently generating about 0.08 per unit of risk. If you would invest 17,300 in Tesla Inc on August 24, 2024 and sell it today you would earn a total of 15,195 from holding Tesla Inc or generate 87.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Tesla Inc vs. NMI Holdings
Performance |
| Timeline |
| Tesla Inc |
| NMI Holdings |
Tesla and NMI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and NMI Holdings
The main advantage of trading using opposite Tesla and NMI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla 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.| Tesla vs. ULTRA CLEAN HLDGS | Tesla vs. ALERION CLEANPOWER | Tesla vs. BOS BETTER ONLINE | Tesla vs. Gruppo Mutuionline SpA |
| NMI Holdings vs. Lion One Metals | NMI Holdings vs. Harmony Gold Mining | NMI Holdings vs. OFFICE DEPOT | NMI Holdings vs. JAPAN TOBACCO UNSPADR12 |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |