Correlation Between Bayerische Motoren and Nissan
Can any of the company-specific risk be diversified away by investing in both Bayerische Motoren and Nissan 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 Bayerische Motoren and Nissan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayerische Motoren Werke and Nissan Motor Co, you can compare the effects of market volatilities on Bayerische Motoren and Nissan 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 Bayerische Motoren with a short position of Nissan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayerische Motoren and Nissan.
Diversification Opportunities for Bayerische Motoren and Nissan
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bayerische and Nissan is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Bayerische Motoren Werke and Nissan Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nissan Motor and Bayerische Motoren 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 Bayerische Motoren Werke are associated (or correlated) with Nissan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nissan Motor has no effect on the direction of Bayerische Motoren i.e., Bayerische Motoren and Nissan go up and down completely randomly.
Pair Corralation between Bayerische Motoren and Nissan
If you would invest 868.00 in Nissan Motor Co on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Nissan Motor Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 0.52% |
| Values | Daily Returns |
Bayerische Motoren Werke vs. Nissan Motor Co
Performance |
| Timeline |
| Bayerische Motoren Werke |
| Nissan Motor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bayerische Motoren and Nissan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayerische Motoren and Nissan
The main advantage of trading using opposite Bayerische Motoren and Nissan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayerische Motoren position performs unexpectedly, Nissan 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 Nissan will offset losses from the drop in Nissan's long position.| Bayerische Motoren vs. Bayerische Motoren Werke | Bayerische Motoren vs. Honda Motor Co | Bayerische Motoren vs. Volkswagen AG VZO | Bayerische Motoren vs. Volkswagen AG |
| Nissan vs. Honda Motor Co | Nissan vs. Toyota Motor | Nissan vs. Hyundai Motor Co | Nissan vs. Bayerische Motoren Werke |
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 Stocks Directory module to find actively traded stocks across global markets.
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