Correlation Between Nikon Corp and JAKKS Pacific
Can any of the company-specific risk be diversified away by investing in both Nikon Corp and JAKKS Pacific 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 Nikon Corp and JAKKS Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nikon Corp and JAKKS Pacific, you can compare the effects of market volatilities on Nikon Corp and JAKKS Pacific 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 Nikon Corp with a short position of JAKKS Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nikon Corp and JAKKS Pacific.
Diversification Opportunities for Nikon Corp and JAKKS Pacific
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nikon and JAKKS is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Nikon Corp and JAKKS Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAKKS Pacific and Nikon Corp 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 Nikon Corp are associated (or correlated) with JAKKS Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAKKS Pacific has no effect on the direction of Nikon Corp i.e., Nikon Corp and JAKKS Pacific go up and down completely randomly.
Pair Corralation between Nikon Corp and JAKKS Pacific
Assuming the 90 days horizon Nikon Corp is expected to generate 0.73 times more return on investment than JAKKS Pacific. However, Nikon Corp is 1.37 times less risky than JAKKS Pacific. It trades about 0.04 of its potential returns per unit of risk. JAKKS Pacific is currently generating about -0.01 per unit of risk. If you would invest 983.00 in Nikon Corp on August 27, 2024 and sell it today you would earn a total of 168.00 from holding Nikon Corp or generate 17.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nikon Corp vs. JAKKS Pacific
Performance |
| Timeline |
| Nikon Corp |
| JAKKS Pacific |
Nikon Corp and JAKKS Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nikon Corp and JAKKS Pacific
The main advantage of trading using opposite Nikon Corp and JAKKS Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nikon Corp position performs unexpectedly, JAKKS Pacific 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 JAKKS Pacific will offset losses from the drop in JAKKS Pacific's long position.| Nikon Corp vs. Yamaha Corp DRC | Nikon Corp vs. Planet Fitness | Nikon Corp vs. Plby Group | Nikon Corp vs. Shimano Inc ADR |
| JAKKS Pacific vs. Escalade Incorporated | JAKKS Pacific vs. Clarus Corp | JAKKS Pacific vs. Six Flags Entertainment | JAKKS Pacific vs. American Outdoor Brands |
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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