Correlation Between Isuzu Motors and Nissan
Can any of the company-specific risk be diversified away by investing in both Isuzu Motors 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 Isuzu Motors and Nissan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Isuzu Motors and Nissan Motor Co, you can compare the effects of market volatilities on Isuzu Motors 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 Isuzu Motors with a short position of Nissan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Isuzu Motors and Nissan.
Diversification Opportunities for Isuzu Motors and Nissan
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Isuzu and Nissan is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Isuzu Motors and Nissan Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nissan Motor and Isuzu Motors 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 Isuzu Motors 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 Isuzu Motors i.e., Isuzu Motors and Nissan go up and down completely randomly.
Pair Corralation between Isuzu Motors and Nissan
Assuming the 90 days horizon Isuzu Motors is expected to generate 0.54 times more return on investment than Nissan. However, Isuzu Motors is 1.86 times less risky than Nissan. It trades about 0.02 of its potential returns per unit of risk. Nissan Motor Co is currently generating about -0.01 per unit of risk. If you would invest 1,262 in Isuzu Motors on September 1, 2024 and sell it today you would earn a total of 68.00 from holding Isuzu Motors or generate 5.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.08% |
| Values | Daily Returns |
Isuzu Motors vs. Nissan Motor Co
Performance |
| Timeline |
| Isuzu Motors |
| Nissan Motor |
Isuzu Motors and Nissan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Isuzu Motors and Nissan
The main advantage of trading using opposite Isuzu Motors and Nissan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Isuzu Motors 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.| Isuzu Motors vs. Suzuki Motor Corp | Isuzu Motors vs. Mitsubishi Estate Co | Isuzu Motors vs. Daiwa House Industry | Isuzu Motors vs. Mitsubishi Electric Corp |
| Nissan vs. Great Wall Motor | Nissan vs. Geely Automobile Holdings | Nissan vs. Geely Automobile Holdings | Nissan vs. Hyundai Motor Co |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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