Correlation Between Nidec and Generac Holdings
Can any of the company-specific risk be diversified away by investing in both Nidec and Generac 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 Nidec and Generac Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nidec and Generac Holdings, you can compare the effects of market volatilities on Nidec and Generac 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 Nidec with a short position of Generac Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nidec and Generac Holdings.
Diversification Opportunities for Nidec and Generac Holdings
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nidec and Generac is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Nidec and Generac Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generac Holdings and Nidec 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 Nidec are associated (or correlated) with Generac Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generac Holdings has no effect on the direction of Nidec i.e., Nidec and Generac Holdings go up and down completely randomly.
Pair Corralation between Nidec and Generac Holdings
If you would invest 16,515 in Generac Holdings on August 31, 2024 and sell it today you would earn a total of 2,525 from holding Generac Holdings or generate 15.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Nidec vs. Generac Holdings
Performance |
| Timeline |
| Nidec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Generac Holdings |
Nidec and Generac Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nidec and Generac Holdings
The main advantage of trading using opposite Nidec and Generac Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nidec position performs unexpectedly, Generac 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 Generac Holdings will offset losses from the drop in Generac Holdings' long position.| Nidec vs. Daifuku Co | Nidec vs. Eaton PLC | Nidec vs. Yokogawa Electric Corp | Nidec vs. Brewbilt Manufacturing |
| Generac Holdings vs. Emerson Electric | Generac Holdings vs. Eaton PLC | Generac Holdings vs. Parker Hannifin | Generac Holdings vs. Illinois Tool Works |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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