Correlation Between Nippon Light and KION Group
Can any of the company-specific risk be diversified away by investing in both Nippon Light and KION Group 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 KION Group 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 KION Group AG, you can compare the effects of market volatilities on Nippon Light and KION Group 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 KION Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nippon Light and KION Group.
Diversification Opportunities for Nippon Light and KION Group
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nippon and KION is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Nippon Light Metal and KION Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KION Group AG 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 KION Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KION Group AG has no effect on the direction of Nippon Light i.e., Nippon Light and KION Group go up and down completely randomly.
Pair Corralation between Nippon Light and KION Group
Assuming the 90 days horizon Nippon Light is expected to generate 9.99 times less return on investment than KION Group. But when comparing it to its historical volatility, Nippon Light Metal is 1.63 times less risky than KION Group. It trades about 0.03 of its potential returns per unit of risk. KION Group AG is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,182 in KION Group AG on October 25, 2024 and sell it today you would earn a total of 232.00 from holding KION Group AG or generate 7.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nippon Light Metal vs. KION Group AG
Performance |
| Timeline |
| Nippon Light Metal |
| KION Group AG |
Nippon Light and KION Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nippon Light and KION Group
The main advantage of trading using opposite Nippon Light and KION Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nippon Light position performs unexpectedly, KION Group 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 KION Group will offset losses from the drop in KION Group's long position.| Nippon Light vs. Apple Inc | Nippon Light vs. Apple Inc | Nippon Light vs. Apple Inc | Nippon Light vs. Apple Inc |
| KION Group vs. MAANSHAN IRON H | KION Group vs. CALTAGIRONE EDITORE | KION Group vs. Nippon Steel | KION Group vs. BlueScope Steel Limited |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |