Correlation Between Mazda and Nissan
Can any of the company-specific risk be diversified away by investing in both Mazda 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 Mazda and Nissan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mazda Motor Corp and Nissan Motor Co, you can compare the effects of market volatilities on Mazda 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 Mazda with a short position of Nissan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mazda and Nissan.
Diversification Opportunities for Mazda and Nissan
Pay attention - limited upside
The 3 months correlation between Mazda and Nissan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mazda Motor Corp and Nissan Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nissan Motor and Mazda 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 Mazda Motor Corp 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 Mazda i.e., Mazda and Nissan go up and down completely randomly.
Pair Corralation between Mazda and Nissan
If you would invest (100.00) in Nissan Motor Co on November 9, 2024 and sell it today you would earn a total of 100.00 from holding Nissan Motor Co or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Mazda Motor Corp vs. Nissan Motor Co
Performance |
| Timeline |
| Mazda Motor Corp |
| Nissan Motor |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Mazda and Nissan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mazda and Nissan
The main advantage of trading using opposite Mazda and Nissan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mazda 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.| Mazda vs. Subaru Corp ADR | Mazda vs. Suzuki Motor Corp | Mazda vs. Isuzu Motors | Mazda vs. Mercedes Benz Group AG |
| Nissan vs. Honda Motor Co | Nissan vs. Toyota Motor | Nissan vs. Hyundai Motor Co | Nissan vs. Mazda Motor Corp |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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