Correlation Between Nmb Financial and SVB T

Can any of the company-specific risk be diversified away by investing in both Nmb Financial and SVB T 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 Nmb Financial and SVB T into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nmb Financial Corp and SVB T Corp, you can compare the effects of market volatilities on Nmb Financial and SVB T 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 Nmb Financial with a short position of SVB T. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nmb Financial and SVB T.

Diversification Opportunities for Nmb Financial and SVB T

0.42

Correlation Coefficient

Nmb Financial  SVB T

Very weak diversification

The 3 months correlation between Nmb and SVB is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Nmb Financial Corp and SVB T Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SVB T Corp and Nmb Financial 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 Nmb Financial Corp are associated (or correlated) with SVB T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SVB T Corp has no effect on the direction of Nmb Financial i.e., Nmb Financial and SVB T go up and down completely randomly.

Pair Corralation between Nmb Financial and SVB T

Given the investment horizon of 90 days Nmb Financial Corp is expected to generate 3.52 times more return on investment than SVB T. However, Nmb Financial is 3.52 times more volatile than SVB T Corp. It trades about 0.03 of its potential returns per unit of risk. SVB T Corp is currently generating about 0.04 per unit of risk. If you would invest  1,400  in Nmb Financial Corp on December 26, 2024 and sell it today you would earn a total of  32.00  from holding Nmb Financial Corp or generate 2.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Nmb Financial Corp  vs.  SVB T Corp

Nmb Financial Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nmb Financial Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental drivers, Nmb Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

SVB T Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SVB T Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental drivers, SVB T is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Nmb Financial and SVB T

The main advantage of trading using opposite Nmb Financial and SVB T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nmb Financial position performs unexpectedly, SVB T 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 SVB T will offset losses from the drop in SVB T's long position.

The idea behind Nmb Financial Corp and SVB T Corp 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.

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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.