Correlation Between NMI Holdings and OAR RESOURCES
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and OAR RESOURCES 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 OAR RESOURCES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and OAR RESOURCES LTD, you can compare the effects of market volatilities on NMI Holdings and OAR RESOURCES 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 OAR RESOURCES. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and OAR RESOURCES.
Diversification Opportunities for NMI Holdings and OAR RESOURCES
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between NMI and OAR is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and OAR RESOURCES LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OAR RESOURCES LTD 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 OAR RESOURCES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OAR RESOURCES LTD has no effect on the direction of NMI Holdings i.e., NMI Holdings and OAR RESOURCES go up and down completely randomly.
Pair Corralation between NMI Holdings and OAR RESOURCES
Assuming the 90 days horizon NMI Holdings is expected to generate 41.58 times less return on investment than OAR RESOURCES. But when comparing it to its historical volatility, NMI Holdings is 42.78 times less risky than OAR RESOURCES. It trades about 0.07 of its potential returns per unit of risk. OAR RESOURCES LTD is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1.00 in OAR RESOURCES LTD on October 6, 2024 and sell it today you would earn a total of 0.00 from holding OAR RESOURCES LTD or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.68% |
Values | Daily Returns |
NMI Holdings vs. OAR RESOURCES LTD
Performance |
Timeline |
NMI Holdings |
OAR RESOURCES LTD |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
NMI Holdings and OAR RESOURCES Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NMI Holdings and OAR RESOURCES
The main advantage of trading using opposite NMI Holdings and OAR RESOURCES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, OAR RESOURCES 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 OAR RESOURCES will offset losses from the drop in OAR RESOURCES's long position.NMI Holdings vs. Calibre Mining Corp | NMI Holdings vs. ADRIATIC METALS LS 013355 | NMI Holdings vs. Forsys Metals Corp | NMI Holdings vs. MCEWEN MINING INC |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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