Correlation Between NMI Holdings and WideOpenWest
Can any of the company-specific risk be diversified away by investing in both NMI Holdings and WideOpenWest 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 WideOpenWest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NMI Holdings and WideOpenWest, you can compare the effects of market volatilities on NMI Holdings and WideOpenWest 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 WideOpenWest. Check out your portfolio center. Please also check ongoing floating volatility patterns of NMI Holdings and WideOpenWest.
Diversification Opportunities for NMI Holdings and WideOpenWest
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between NMI and WideOpenWest is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding NMI Holdings and WideOpenWest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WideOpenWest 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 WideOpenWest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WideOpenWest has no effect on the direction of NMI Holdings i.e., NMI Holdings and WideOpenWest go up and down completely randomly.
Pair Corralation between NMI Holdings and WideOpenWest
Assuming the 90 days horizon NMI Holdings is expected to under-perform the WideOpenWest. But the stock apears to be less risky and, when comparing its historical volatility, NMI Holdings is 1.48 times less risky than WideOpenWest. The stock trades about -0.08 of its potential returns per unit of risk. The WideOpenWest is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 486.00 in WideOpenWest on December 4, 2024 and sell it today you would lose (42.00) from holding WideOpenWest or give up 8.64% 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. WideOpenWest
Performance |
Timeline |
NMI Holdings |
WideOpenWest |
NMI Holdings and WideOpenWest Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NMI Holdings and WideOpenWest
The main advantage of trading using opposite NMI Holdings and WideOpenWest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NMI Holdings position performs unexpectedly, WideOpenWest 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 WideOpenWest will offset losses from the drop in WideOpenWest's long position.NMI Holdings vs. tokentus investment AG | NMI Holdings vs. Gladstone Investment | NMI Holdings vs. PennantPark Investment | NMI Holdings vs. JLF INVESTMENT |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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