Correlation Between NH HOTEL and NIKKON HOLDINGS
Can any of the company-specific risk be diversified away by investing in both NH HOTEL and NIKKON HOLDINGS 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 NH HOTEL and NIKKON HOLDINGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH HOTEL GROUP and NIKKON HOLDINGS TD, you can compare the effects of market volatilities on NH HOTEL and NIKKON HOLDINGS 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 NH HOTEL with a short position of NIKKON HOLDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH HOTEL and NIKKON HOLDINGS.
Diversification Opportunities for NH HOTEL and NIKKON HOLDINGS
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NH5 and NIKKON is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding NH HOTEL GROUP and NIKKON HOLDINGS TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIKKON HOLDINGS TD and NH HOTEL 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 NH HOTEL GROUP are associated (or correlated) with NIKKON HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIKKON HOLDINGS TD has no effect on the direction of NH HOTEL i.e., NH HOTEL and NIKKON HOLDINGS go up and down completely randomly.
Pair Corralation between NH HOTEL and NIKKON HOLDINGS
Assuming the 90 days trading horizon NH HOTEL GROUP is expected to generate 1.94 times more return on investment than NIKKON HOLDINGS. However, NH HOTEL is 1.94 times more volatile than NIKKON HOLDINGS TD. It trades about 0.04 of its potential returns per unit of risk. NIKKON HOLDINGS TD is currently generating about 0.07 per unit of risk. If you would invest 368.00 in NH HOTEL GROUP on September 14, 2024 and sell it today you would earn a total of 75.00 from holding NH HOTEL GROUP or generate 20.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH HOTEL GROUP vs. NIKKON HOLDINGS TD
Performance |
| Timeline |
| NH HOTEL GROUP |
| NIKKON HOLDINGS TD |
NH HOTEL and NIKKON HOLDINGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH HOTEL and NIKKON HOLDINGS
The main advantage of trading using opposite NH HOTEL and NIKKON HOLDINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH HOTEL position performs unexpectedly, NIKKON HOLDINGS 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 NIKKON HOLDINGS will offset losses from the drop in NIKKON HOLDINGS's long position.| NH HOTEL vs. Brockhaus Capital Management | NH HOTEL vs. MTI WIRELESS EDGE | NH HOTEL vs. Zijin Mining Group | NH HOTEL vs. MAVEN WIRELESS SWEDEN |
| NIKKON HOLDINGS vs. Dalata Hotel Group | NIKKON HOLDINGS vs. Meli Hotels International | NIKKON HOLDINGS vs. NH HOTEL GROUP | NIKKON HOLDINGS vs. Boyd Gaming |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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