Correlation Between Nissan and Holmes Place
Can any of the company-specific risk be diversified away by investing in both Nissan and Holmes Place 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 Nissan and Holmes Place into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nissan and Holmes Place International, you can compare the effects of market volatilities on Nissan and Holmes Place 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 Nissan with a short position of Holmes Place. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nissan and Holmes Place.
Diversification Opportunities for Nissan and Holmes Place
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nissan and Holmes is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Nissan and Holmes Place International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holmes Place Interna and Nissan 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 Nissan are associated (or correlated) with Holmes Place. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holmes Place Interna has no effect on the direction of Nissan i.e., Nissan and Holmes Place go up and down completely randomly.
Pair Corralation between Nissan and Holmes Place
Assuming the 90 days trading horizon Nissan is expected to under-perform the Holmes Place. In addition to that, Nissan is 1.45 times more volatile than Holmes Place International. It trades about -0.09 of its total potential returns per unit of risk. Holmes Place International is currently generating about 0.15 per unit of volatility. If you would invest 52,410 in Holmes Place International on September 1, 2024 and sell it today you would earn a total of 3,560 from holding Holmes Place International or generate 6.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nissan vs. Holmes Place International
Performance |
| Timeline |
| Nissan |
| Holmes Place Interna |
Nissan and Holmes Place Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nissan and Holmes Place
The main advantage of trading using opposite Nissan and Holmes Place positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nissan position performs unexpectedly, Holmes Place 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 Holmes Place will offset losses from the drop in Holmes Place's long position.| Nissan vs. Bezeq Israeli Telecommunication | Nissan vs. Brainsway | Nissan vs. Mivne Real Estate | Nissan vs. Photomyne |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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