Correlation Between NioCorp Developments and Hitachi Metals
Can any of the company-specific risk be diversified away by investing in both NioCorp Developments and Hitachi Metals 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 NioCorp Developments and Hitachi Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NioCorp Developments Ltd and Hitachi Metals, you can compare the effects of market volatilities on NioCorp Developments and Hitachi Metals 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 NioCorp Developments with a short position of Hitachi Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of NioCorp Developments and Hitachi Metals.
Diversification Opportunities for NioCorp Developments and Hitachi Metals
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NioCorp and Hitachi is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding NioCorp Developments Ltd and Hitachi Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitachi Metals and NioCorp Developments 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 NioCorp Developments Ltd are associated (or correlated) with Hitachi Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitachi Metals has no effect on the direction of NioCorp Developments i.e., NioCorp Developments and Hitachi Metals go up and down completely randomly.
Pair Corralation between NioCorp Developments and Hitachi Metals
If you would invest 100,000,000 in Hitachi Metals on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Hitachi Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.37% |
| Values | Daily Returns |
NioCorp Developments Ltd vs. Hitachi Metals
Performance |
| Timeline |
| NioCorp Developments |
| Hitachi Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
NioCorp Developments and Hitachi Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NioCorp Developments and Hitachi Metals
The main advantage of trading using opposite NioCorp Developments and Hitachi Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NioCorp Developments position performs unexpectedly, Hitachi Metals 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 Hitachi Metals will offset losses from the drop in Hitachi Metals' long position.| NioCorp Developments vs. Paiute Oil Mining | NioCorp Developments vs. Marfrig Global Foods | NioCorp Developments vs. Emerson Radio | NioCorp Developments vs. Reservoir Media |
| Hitachi Metals vs. Asure Software | Hitachi Metals vs. WPP PLC ADR | Hitachi Metals vs. Arrow Electronics | Hitachi Metals vs. Lipocine |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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