Correlation Between GFL ENVIRONM(SUBVTSH and NMI Holdings

Can any of the company-specific risk be diversified away by investing in both GFL ENVIRONM(SUBVTSH 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 GFL ENVIRONM(SUBVTSH and NMI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GFL ENVIRONM and NMI Holdings, you can compare the effects of market volatilities on GFL ENVIRONM(SUBVTSH 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 GFL ENVIRONM(SUBVTSH with a short position of NMI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of GFL ENVIRONM(SUBVTSH and NMI Holdings.

Diversification Opportunities for GFL ENVIRONM(SUBVTSH and NMI Holdings

-0.31

Correlation Coefficient

GFL ENVIRONM(SUBVTSH  NMI Holdings

Very good diversification

The 3 months correlation between GFL and NMI is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding GFL ENVIRONM and NMI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NMI Holdings and GFL ENVIRONM(SUBVTSH 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 GFL ENVIRONM 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 GFL ENVIRONM(SUBVTSH i.e., GFL ENVIRONM(SUBVTSH and NMI Holdings go up and down completely randomly.

Pair Corralation between GFL ENVIRONM(SUBVTSH and NMI Holdings

Assuming the 90 days horizon GFL ENVIRONM is expected to generate 0.82 times more return on investment than NMI Holdings. However, GFL ENVIRONM is 1.21 times less risky than NMI Holdings. It trades about 0.32 of its potential returns per unit of risk. NMI Holdings is currently generating about 0.13 per unit of risk. If you would invest  3,820  in GFL ENVIRONM on August 31, 2024 and sell it today you would earn a total of  540.00  from holding GFL ENVIRONM or generate 14.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

GFL ENVIRONM  vs.  NMI Holdings

GFL ENVIRONM(SUBVTSH

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GFL ENVIRONM are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, GFL ENVIRONM(SUBVTSH may actually be approaching a critical reversion point that can send shares even higher in December 2024.

NMI Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NMI Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, NMI Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with GFL ENVIRONM(SUBVTSH and NMI Holdings

The main advantage of trading using opposite GFL ENVIRONM(SUBVTSH and NMI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GFL ENVIRONM(SUBVTSH 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.

The idea behind GFL ENVIRONM and NMI Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.