Correlation Between Alibaba Health and NMI Holdings
Can any of the company-specific risk be diversified away by investing in both Alibaba Health 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 Alibaba Health and NMI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alibaba Health Information and NMI Holdings, you can compare the effects of market volatilities on Alibaba Health 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 Alibaba Health with a short position of NMI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Health and NMI Holdings.
Diversification Opportunities for Alibaba Health and NMI Holdings
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alibaba and NMI is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Health Information and NMI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NMI Holdings and Alibaba Health 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 Alibaba Health Information 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 Alibaba Health i.e., Alibaba Health and NMI Holdings go up and down completely randomly.
Pair Corralation between Alibaba Health and NMI Holdings
Assuming the 90 days horizon Alibaba Health Information is expected to under-perform the NMI Holdings. In addition to that, Alibaba Health is 1.21 times more volatile than NMI Holdings. It trades about -0.32 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 3,700 in NMI Holdings on October 10, 2024 and sell it today you would lose (140.00) from holding NMI Holdings or give up 3.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alibaba Health Information vs. NMI Holdings
Performance |
| Timeline |
| Alibaba Health Infor |
| NMI Holdings |
Alibaba Health and NMI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alibaba Health and NMI Holdings
The main advantage of trading using opposite Alibaba Health and NMI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Health 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.| Alibaba Health vs. Superior Plus Corp | Alibaba Health vs. NMI Holdings | Alibaba Health vs. SIVERS SEMICONDUCTORS AB | Alibaba Health vs. Talanx AG |
| NMI Holdings vs. Austevoll Seafood ASA | NMI Holdings vs. alstria office REIT AG | NMI Holdings vs. United Natural Foods | NMI Holdings vs. CITY OFFICE REIT |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |