Correlation Between NMI Holdings and Antofagasta Plc
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and Antofagasta Plc 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 Antofagasta Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and Antofagasta plc, you can compare the effects of market volatilities on NMI Holdings and Antofagasta Plc 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 Antofagasta Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and Antofagasta Plc.
Diversification Opportunities for NMI Holdings and Antofagasta Plc
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between NMI and Antofagasta is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and Antofagasta plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antofagasta plc 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 Antofagasta Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antofagasta plc has no effect on the direction of NMI Holdings i.e., NMI Holdings and Antofagasta Plc go up and down completely randomly.
Pair Corralation between NMI Holdings and Antofagasta Plc
Assuming the 90 days horizon NMI Holdings is expected to generate 0.72 times more return on investment than Antofagasta Plc. However, NMI Holdings is 1.39 times less risky than Antofagasta Plc. It trades about -0.02 of its potential returns per unit of risk. Antofagasta plc is currently generating about -0.04 per unit of risk. If you would invest 3,700 in NMI Holdings on September 20, 2024 and sell it today you would lose (100.00) from holding NMI Holdings or give up 2.7% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
NMI Holdings vs. Antofagasta plc
Performance |
Timeline |
NMI Holdings |
Antofagasta plc |
NMI Holdings and Antofagasta Plc Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NMI Holdings and Antofagasta Plc
The main advantage of trading using opposite NMI Holdings and Antofagasta Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, Antofagasta Plc 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 Antofagasta Plc will offset losses from the drop in Antofagasta Plc's long position.NMI Holdings vs. Insurance Australia Group | NMI Holdings vs. Superior Plus Corp | NMI Holdings vs. SIVERS SEMICONDUCTORS AB | NMI Holdings vs. CHINA HUARONG ENERHD 50 |
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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 Stocks Directory module to find actively traded stocks across global markets.
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