Correlation Between NMI Holdings and TSOGO SUN

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

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

Diversification Opportunities for NMI Holdings and TSOGO SUN

-0.02

Correlation Coefficient

NMI Holdings  TSOGO SUN

Good diversification

The 3 months correlation between NMI and TSOGO is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and TSOGO SUN GAMING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TSOGO SUN GAMING 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 TSOGO SUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TSOGO SUN GAMING has no effect on the direction of NMI Holdings i.e., NMI Holdings and TSOGO SUN go up and down completely randomly.

Pair Corralation between NMI Holdings and TSOGO SUN

Assuming the 90 days horizon NMI Holdings is expected to generate 1.05 times more return on investment than TSOGO SUN. However, NMI Holdings is 1.05 times more volatile than TSOGO SUN GAMING. It trades about 0.03 of its potential returns per unit of risk. TSOGO SUN GAMING is currently generating about 0.02 per unit of risk. If you would invest  3,700  in NMI Holdings on August 31, 2024 and sell it today you would earn a total of  100.00  from holding NMI Holdings or generate 2.7% 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.  TSOGO SUN GAMING

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.

TSOGO SUN GAMING

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with NMI Holdings and TSOGO SUN

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

The idea behind NMI Holdings and TSOGO SUN GAMING 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.