Correlation Between PPHE HOTEL and Nisshin Seifun
Can any of the company-specific risk be diversified away by investing in both PPHE HOTEL and Nisshin Seifun 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 PPHE HOTEL and Nisshin Seifun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPHE HOTEL GROUP and Nisshin Seifun Group, you can compare the effects of market volatilities on PPHE HOTEL and Nisshin Seifun 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 PPHE HOTEL with a short position of Nisshin Seifun. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE HOTEL and Nisshin Seifun.
Diversification Opportunities for PPHE HOTEL and Nisshin Seifun
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between PPHE and Nisshin is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding PPHE HOTEL GROUP and Nisshin Seifun Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nisshin Seifun Group and PPHE HOTEL 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 PPHE HOTEL GROUP are associated (or correlated) with Nisshin Seifun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nisshin Seifun Group has no effect on the direction of PPHE HOTEL i.e., PPHE HOTEL and Nisshin Seifun go up and down completely randomly.
Pair Corralation between PPHE HOTEL and Nisshin Seifun
Assuming the 90 days trading horizon PPHE HOTEL GROUP is expected to under-perform the Nisshin Seifun. In addition to that, PPHE HOTEL is 4.09 times more volatile than Nisshin Seifun Group. It trades about -0.18 of its total potential returns per unit of risk. Nisshin Seifun Group is currently generating about -0.34 per unit of volatility. If you would invest 1,110 in Nisshin Seifun Group on October 25, 2024 and sell it today you would lose (40.00) from holding Nisshin Seifun Group or give up 3.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
PPHE HOTEL GROUP vs. Nisshin Seifun Group
Performance |
| Timeline |
| PPHE HOTEL GROUP |
| Nisshin Seifun Group |
PPHE HOTEL and Nisshin Seifun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE HOTEL and Nisshin Seifun
The main advantage of trading using opposite PPHE HOTEL and Nisshin Seifun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE HOTEL position performs unexpectedly, Nisshin Seifun 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 Nisshin Seifun will offset losses from the drop in Nisshin Seifun's long position.| PPHE HOTEL vs. PURETECH HEALTH PLC | PPHE HOTEL vs. NIGHTINGALE HEALTH EO | PPHE HOTEL vs. EPSILON HEALTHCARE LTD | PPHE HOTEL vs. Datadog |
| Nisshin Seifun vs. Major Drilling Group | Nisshin Seifun vs. TELECOM ITALIA | Nisshin Seifun vs. Entravision Communications | Nisshin Seifun vs. Platinum Investment Management |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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