Correlation Between Hitachi Construction and NEXA RESOURCES
Can any of the company-specific risk be diversified away by investing in both Hitachi Construction and NEXA RESOURCES 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 Hitachi Construction and NEXA RESOURCES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hitachi Construction Machinery and NEXA RESOURCES SA, you can compare the effects of market volatilities on Hitachi Construction and NEXA RESOURCES 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 Hitachi Construction with a short position of NEXA RESOURCES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hitachi Construction and NEXA RESOURCES.
Diversification Opportunities for Hitachi Construction and NEXA RESOURCES
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hitachi and NEXA is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hitachi Construction Machinery and NEXA RESOURCES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXA RESOURCES SA and Hitachi Construction 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 Hitachi Construction Machinery are associated (or correlated) with NEXA RESOURCES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXA RESOURCES SA has no effect on the direction of Hitachi Construction i.e., Hitachi Construction and NEXA RESOURCES go up and down completely randomly.
Pair Corralation between Hitachi Construction and NEXA RESOURCES
Assuming the 90 days horizon Hitachi Construction Machinery is expected to generate 0.3 times more return on investment than NEXA RESOURCES. However, Hitachi Construction Machinery is 3.35 times less risky than NEXA RESOURCES. It trades about -0.1 of its potential returns per unit of risk. NEXA RESOURCES SA is currently generating about -0.05 per unit of risk. If you would invest 2,160 in Hitachi Construction Machinery on October 7, 2024 and sell it today you would lose (60.00) from holding Hitachi Construction Machinery or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hitachi Construction Machinery vs. NEXA RESOURCES SA
Performance |
| Timeline |
| Hitachi Construction |
| NEXA RESOURCES SA |
Hitachi Construction and NEXA RESOURCES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hitachi Construction and NEXA RESOURCES
The main advantage of trading using opposite Hitachi Construction and NEXA RESOURCES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hitachi Construction position performs unexpectedly, NEXA RESOURCES 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 NEXA RESOURCES will offset losses from the drop in NEXA RESOURCES's long position.| Hitachi Construction vs. Superior Plus Corp | Hitachi Construction vs. NMI Holdings | Hitachi Construction vs. SIVERS SEMICONDUCTORS AB | Hitachi Construction vs. Talanx AG |
| NEXA RESOURCES vs. NXP Semiconductors NV | NEXA RESOURCES vs. TRAINLINE PLC LS | NEXA RESOURCES vs. EVS Broadcast Equipment | NEXA RESOURCES vs. Elmos Semiconductor SE |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |