Correlation Between Nippon Active and Thor Mining
Can any of the company-specific risk be diversified away by investing in both Nippon Active and Thor Mining 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 Active and Thor Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nippon Active Value and Thor Mining PLC, you can compare the effects of market volatilities on Nippon Active and Thor Mining 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 Active with a short position of Thor Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nippon Active and Thor Mining.
Diversification Opportunities for Nippon Active and Thor Mining
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nippon and Thor is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Nippon Active Value and Thor Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Mining PLC and Nippon Active 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 Active Value are associated (or correlated) with Thor Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Mining PLC has no effect on the direction of Nippon Active i.e., Nippon Active and Thor Mining go up and down completely randomly.
Pair Corralation between Nippon Active and Thor Mining
Assuming the 90 days trading horizon Nippon Active Value is expected to generate 0.17 times more return on investment than Thor Mining. However, Nippon Active Value is 5.9 times less risky than Thor Mining. It trades about 0.14 of its potential returns per unit of risk. Thor Mining PLC is currently generating about -0.04 per unit of risk. If you would invest 18,000 in Nippon Active Value on September 22, 2024 and sell it today you would earn a total of 900.00 from holding Nippon Active Value or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.78% |
| Values | Daily Returns |
Nippon Active Value vs. Thor Mining PLC
Performance |
| Timeline |
| Nippon Active Value |
| Thor Mining PLC |
Nippon Active and Thor Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nippon Active and Thor Mining
The main advantage of trading using opposite Nippon Active and Thor Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nippon Active position performs unexpectedly, Thor Mining 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 Thor Mining will offset losses from the drop in Thor Mining's long position.| Nippon Active vs. Samsung Electronics Co | Nippon Active vs. Samsung Electronics Co | Nippon Active vs. Hyundai Motor | Nippon Active vs. Toyota Motor Corp |
| Thor Mining vs. Givaudan SA | Thor Mining vs. Antofagasta PLC | Thor Mining vs. Ferrexpo PLC | Thor Mining vs. Atalaya Mining |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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