Correlation Between Zhongsheng Group and NMI Holdings

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

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

Diversification Opportunities for Zhongsheng Group and NMI Holdings

0.0

Correlation Coefficient

Zhongsheng Group  NMI Holdings

Pay attention - limited upside

The 3 months correlation between Zhongsheng and NMI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Zhongsheng Group Holdings and NMI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NMI Holdings and Zhongsheng Group 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 Zhongsheng Group Holdings 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 Zhongsheng Group i.e., Zhongsheng Group and NMI Holdings go up and down completely randomly.

Pair Corralation between Zhongsheng Group and NMI Holdings

If you would invest  173.00  in Zhongsheng Group Holdings on October 4, 2024 and sell it today you would lose (7.00) from holding Zhongsheng Group Holdings or give up 4.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Zhongsheng Group Holdings  vs.  NMI Holdings

Zhongsheng Group Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Zhongsheng Group Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Zhongsheng Group is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

NMI Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NMI Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Zhongsheng Group and NMI Holdings

The main advantage of trading using opposite Zhongsheng Group and NMI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongsheng Group 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 Zhongsheng Group Holdings 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.