Correlation Between Nippon Light and ANTA SPORTS
Can any of the company-specific risk be diversified away by investing in both Nippon Light and ANTA SPORTS 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 Nippon Light and ANTA SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nippon Light Metal and ANTA SPORTS PRODUCT, you can compare the effects of market volatilities on Nippon Light and ANTA SPORTS 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 Nippon Light with a short position of ANTA SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nippon Light and ANTA SPORTS.
Diversification Opportunities for Nippon Light and ANTA SPORTS
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nippon and ANTA is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Nippon Light Metal and ANTA SPORTS PRODUCT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA SPORTS PRODUCT and Nippon Light 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 Nippon Light Metal are associated (or correlated) with ANTA SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTA SPORTS PRODUCT has no effect on the direction of Nippon Light i.e., Nippon Light and ANTA SPORTS go up and down completely randomly.
Pair Corralation between Nippon Light and ANTA SPORTS
Assuming the 90 days horizon Nippon Light Metal is expected to generate 1.1 times more return on investment than ANTA SPORTS. However, Nippon Light is 1.1 times more volatile than ANTA SPORTS PRODUCT. It trades about -0.01 of its potential returns per unit of risk. ANTA SPORTS PRODUCT is currently generating about -0.03 per unit of risk. If you would invest 920.00 in Nippon Light Metal on October 17, 2024 and sell it today you would lose (5.00) from holding Nippon Light Metal or give up 0.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nippon Light Metal vs. ANTA SPORTS PRODUCT
Performance |
| Timeline |
| Nippon Light Metal |
| ANTA SPORTS PRODUCT |
Nippon Light and ANTA SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nippon Light and ANTA SPORTS
The main advantage of trading using opposite Nippon Light and ANTA SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nippon Light position performs unexpectedly, ANTA SPORTS 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 ANTA SPORTS will offset losses from the drop in ANTA SPORTS's long position.| Nippon Light vs. ALBIS LEASING AG | Nippon Light vs. MIRAMAR HOTEL INV | Nippon Light vs. United Rentals | Nippon Light vs. Global Ship Lease |
| ANTA SPORTS vs. FIREWEED METALS P | ANTA SPORTS vs. SIERRA METALS | ANTA SPORTS vs. Nippon Light Metal | ANTA SPORTS vs. Air Transport Services |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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