Correlation Between NMI Holdings and Beijing Media
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Beijing Media 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 NMI Holdings and Beijing Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Beijing Media, you can compare the effects of market volatilities on NMI Holdings and Beijing Media 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 NMI Holdings with a short position of Beijing Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Beijing Media.
Diversification Opportunities for NMI Holdings and Beijing Media
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between NMI and Beijing is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Beijing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Media and NMI Holdings 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 NMI Holdings are associated (or correlated) with Beijing Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Media has no effect on the direction of NMI Holdings i.e., NMI Holdings and Beijing Media go up and down completely randomly.
Pair Corralation between NMI Holdings and Beijing Media
Assuming the 90 days horizon NMI Holdings is expected to generate 0.47 times more return on investment than Beijing Media. However, NMI Holdings is 2.12 times less risky than Beijing Media. It trades about 0.02 of its potential returns per unit of risk. Beijing Media is currently generating about 0.0 per unit of risk. If you would invest 3,700 in NMI Holdings on September 3, 2024 and sell it today you would earn a total of 60.00 from holding NMI Holdings or generate 1.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
NMI Holdings vs. Beijing Media
Performance |
Timeline |
NMI Holdings |
Beijing Media |
NMI Holdings and Beijing Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NMI Holdings and Beijing Media
The main advantage of trading using opposite NMI Holdings and Beijing Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Beijing Media 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 Beijing Media will offset losses from the drop in Beijing Media's long position.NMI Holdings vs. Harmony Gold Mining | NMI Holdings vs. WT OFFSHORE | NMI Holdings vs. Luckin Coffee | NMI Holdings vs. BJs Restaurants |
Beijing Media vs. MEDICAL FACILITIES NEW | Beijing Media vs. Avanos Medical | Beijing Media vs. Diamyd Medical AB | Beijing Media vs. FARO Technologies |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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