Correlation Between NMI Holdings and ALLIANZ TECHNOTRLS-025

Can any of the company-specific risk be diversified away by investing in both NMI Holdings and ALLIANZ TECHNOTRLS-025 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 ALLIANZ TECHNOTRLS-025 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NMI Holdings and ALLIANZ TECHNOTRLS 025, you can compare the effects of market volatilities on NMI Holdings and ALLIANZ TECHNOTRLS-025 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 ALLIANZ TECHNOTRLS-025. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and ALLIANZ TECHNOTRLS-025.

Diversification Opportunities for NMI Holdings and ALLIANZ TECHNOTRLS-025

-0.21

Correlation Coefficient

NMI Holdings  ALLIANZ TECHNOTRLS-025

Very good diversification

The 3 months correlation between NMI and ALLIANZ is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and ALLIANZ TECHNOTRLS 025 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLIANZ TECHNOTRLS 025 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 ALLIANZ TECHNOTRLS-025. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALLIANZ TECHNOTRLS 025 has no effect on the direction of NMI Holdings i.e., NMI Holdings and ALLIANZ TECHNOTRLS-025 go up and down completely randomly.

Pair Corralation between NMI Holdings and ALLIANZ TECHNOTRLS-025

Assuming the 90 days horizon NMI Holdings is expected to under-perform the ALLIANZ TECHNOTRLS-025. In addition to that, NMI Holdings is 1.22 times more volatile than ALLIANZ TECHNOTRLS 025. It trades about -0.03 of its total potential returns per unit of risk. ALLIANZ TECHNOTRLS 025 is currently generating about 0.22 per unit of volatility. If you would invest  420.00  in ALLIANZ TECHNOTRLS 025 on October 8, 2024 and sell it today you would earn a total of  90.00  from holding ALLIANZ TECHNOTRLS 025 or generate 21.43% 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.  ALLIANZ TECHNOTRLS 025

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.

ALLIANZ TECHNOTRLS 025

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ALLIANZ TECHNOTRLS 025 are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, ALLIANZ TECHNOTRLS-025 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NMI Holdings and ALLIANZ TECHNOTRLS-025

The main advantage of trading using opposite NMI Holdings and ALLIANZ TECHNOTRLS-025 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, ALLIANZ TECHNOTRLS-025 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 ALLIANZ TECHNOTRLS-025 will offset losses from the drop in ALLIANZ TECHNOTRLS-025's long position.

The idea behind NMI Holdings and ALLIANZ TECHNOTRLS 025 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.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.