Correlation Between Great Wall and Nissan
Can any of the company-specific risk be diversified away by investing in both Great Wall 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 Great Wall and Nissan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Wall Motor and Nissan Motor Co, you can compare the effects of market volatilities on Great Wall 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 Great Wall with a short position of Nissan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Wall and Nissan.
Diversification Opportunities for Great Wall and Nissan
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Great and Nissan is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Great Wall Motor and Nissan Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nissan Motor and Great Wall 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 Great Wall Motor 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 Great Wall i.e., Great Wall and Nissan go up and down completely randomly.
Pair Corralation between Great Wall and Nissan
If you would invest 144.00 in Great Wall Motor on September 3, 2024 and sell it today you would earn a total of 20.00 from holding Great Wall Motor or generate 13.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.74% |
| Values | Daily Returns |
Great Wall Motor vs. Nissan Motor Co
Performance |
| Timeline |
| Great Wall Motor |
| Nissan Motor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Great Wall and Nissan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Wall and Nissan
The main advantage of trading using opposite Great Wall and Nissan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Wall 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.| Great Wall vs. Mitsubishi Motors Corp | Great Wall vs. Geely Automobile Holdings | Great Wall vs. Hyundai Motor Co | Great Wall vs. Volkswagen AG 110 |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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