Correlation Between Bondbloxx ETF and Nmb Financial

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

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

Diversification Opportunities for Bondbloxx ETF and Nmb Financial

-0.63

Correlation Coefficient

Bondbloxx ETF  Nmb Financial

Excellent diversification

The 3 months correlation between Bondbloxx and Nmb is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bondbloxx ETF Trust and Nmb Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nmb Financial Corp and Bondbloxx ETF 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 Bondbloxx ETF Trust are associated (or correlated) with Nmb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nmb Financial Corp has no effect on the direction of Bondbloxx ETF i.e., Bondbloxx ETF and Nmb Financial go up and down completely randomly.

Pair Corralation between Bondbloxx ETF and Nmb Financial

Given the investment horizon of 90 days Bondbloxx ETF is expected to generate 8.44 times less return on investment than Nmb Financial. But when comparing it to its historical volatility, Bondbloxx ETF Trust is 1.5 times less risky than Nmb Financial. It trades about 0.02 of its potential returns per unit of risk. Nmb Financial Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  974.00  in Nmb Financial Corp on October 1, 2024 and sell it today you would earn a total of  426.00  from holding Nmb Financial Corp or generate 43.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	69.2%
Values	Daily Returns

Bondbloxx ETF Trust  vs.  Nmb Financial Corp

Bondbloxx ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bondbloxx ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Nmb Financial Corp

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nmb Financial Corp are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady fundamental drivers, Nmb Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bondbloxx ETF and Nmb Financial

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

The idea behind Bondbloxx ETF Trust and Nmb Financial 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.