Correlation Between Nikon Corp and Shimano
Can any of the company-specific risk be diversified away by investing in both Nikon Corp and Shimano 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 Shimano into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nikon Corp and Shimano, you can compare the effects of market volatilities on Nikon Corp and Shimano 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 Shimano. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nikon Corp and Shimano.
Diversification Opportunities for Nikon Corp and Shimano
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nikon and Shimano is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Nikon Corp and Shimano in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shimano 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 Shimano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shimano has no effect on the direction of Nikon Corp i.e., Nikon Corp and Shimano go up and down completely randomly.
Pair Corralation between Nikon Corp and Shimano
Assuming the 90 days horizon Nikon Corp is expected to generate 1.05 times more return on investment than Shimano. However, Nikon Corp is 1.05 times more volatile than Shimano. It trades about 0.04 of its potential returns per unit of risk. Shimano 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 Against |
| Strength | Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Nikon Corp vs. Shimano
Performance |
| Timeline |
| Nikon Corp |
| Shimano |
Nikon Corp and Shimano Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nikon Corp and Shimano
The main advantage of trading using opposite Nikon Corp and Shimano positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nikon Corp position performs unexpectedly, Shimano 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 Shimano will offset losses from the drop in Shimano'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 |
| Shimano vs. HUMANA INC | Shimano vs. Aquagold International | Shimano vs. Barloworld Ltd ADR | Shimano vs. Morningstar Unconstrained Allocation |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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