Correlation Between American Superconductor and Nidec
Can any of the company-specific risk be diversified away by investing in both American Superconductor and Nidec 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 American Superconductor and Nidec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Superconductor and Nidec, you can compare the effects of market volatilities on American Superconductor and Nidec 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 American Superconductor with a short position of Nidec. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Superconductor and Nidec.
Diversification Opportunities for American Superconductor and Nidec
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Nidec is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding American Superconductor and Nidec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nidec and American Superconductor 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 American Superconductor are associated (or correlated) with Nidec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nidec has no effect on the direction of American Superconductor i.e., American Superconductor and Nidec go up and down completely randomly.
Pair Corralation between American Superconductor and Nidec
Given the investment horizon of 90 days American Superconductor is expected to generate 0.87 times more return on investment than Nidec. However, American Superconductor is 1.15 times less risky than Nidec. It trades about 0.07 of its potential returns per unit of risk. Nidec is currently generating about 0.04 per unit of risk. If you would invest 2,381 in American Superconductor on September 13, 2024 and sell it today you would earn a total of 256.00 from holding American Superconductor or generate 10.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Superconductor vs. Nidec
Performance |
| Timeline |
| American Superconductor |
| Nidec |
American Superconductor and Nidec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Superconductor and Nidec
The main advantage of trading using opposite American Superconductor and Nidec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Superconductor position performs unexpectedly, Nidec 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 Nidec will offset losses from the drop in Nidec's long position.| American Superconductor vs. Barnes Group | American Superconductor vs. Babcock Wilcox Enterprises | American Superconductor vs. Crane Company | American Superconductor vs. Hillenbrand |
| Nidec vs. Xinjiang Goldwind Science | Nidec vs. American Superconductor | Nidec vs. Cummins | Nidec vs. Aquagold International |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |