Correlation Between AAC TECHNOLOGHLDGADR and NISSIN FOODS
Can any of the company-specific risk be diversified away by investing in both AAC TECHNOLOGHLDGADR and NISSIN FOODS 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 AAC TECHNOLOGHLDGADR and NISSIN FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAC TECHNOLOGHLDGADR and NISSIN FOODS HLDGS, you can compare the effects of market volatilities on AAC TECHNOLOGHLDGADR and NISSIN FOODS 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 AAC TECHNOLOGHLDGADR with a short position of NISSIN FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC TECHNOLOGHLDGADR and NISSIN FOODS.
Diversification Opportunities for AAC TECHNOLOGHLDGADR and NISSIN FOODS
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between AAC and NISSIN is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding AAC TECHNOLOGHLDGADR and NISSIN FOODS HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISSIN FOODS HLDGS and AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR are associated (or correlated) with NISSIN FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISSIN FOODS HLDGS has no effect on the direction of AAC TECHNOLOGHLDGADR i.e., AAC TECHNOLOGHLDGADR and NISSIN FOODS go up and down completely randomly.
Pair Corralation between AAC TECHNOLOGHLDGADR and NISSIN FOODS
Assuming the 90 days horizon AAC TECHNOLOGHLDGADR is expected to generate 1.35 times more return on investment than NISSIN FOODS. However, AAC TECHNOLOGHLDGADR is 1.35 times more volatile than NISSIN FOODS HLDGS. It trades about 0.17 of its potential returns per unit of risk. NISSIN FOODS HLDGS is currently generating about 0.04 per unit of risk. If you would invest 360.00 in AAC TECHNOLOGHLDGADR on September 1, 2024 and sell it today you would earn a total of 46.00 from holding AAC TECHNOLOGHLDGADR or generate 12.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAC TECHNOLOGHLDGADR vs. NISSIN FOODS HLDGS
Performance |
| Timeline |
| AAC TECHNOLOGHLDGADR |
| NISSIN FOODS HLDGS |
AAC TECHNOLOGHLDGADR and NISSIN FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAC TECHNOLOGHLDGADR and NISSIN FOODS
The main advantage of trading using opposite AAC TECHNOLOGHLDGADR and NISSIN FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAC TECHNOLOGHLDGADR position performs unexpectedly, NISSIN FOODS 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 NISSIN FOODS will offset losses from the drop in NISSIN FOODS's long position.| AAC TECHNOLOGHLDGADR vs. Motorola Solutions | AAC TECHNOLOGHLDGADR vs. Nokia | AAC TECHNOLOGHLDGADR vs. ZTE Corporation | AAC TECHNOLOGHLDGADR vs. Hewlett Packard Enterprise |
| NISSIN FOODS vs. SIVERS SEMICONDUCTORS AB | NISSIN FOODS vs. Darden Restaurants | NISSIN FOODS vs. Reliance Steel Aluminum | NISSIN FOODS vs. Q2M Managementberatung AG |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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