Correlation Between Nidec and Rosinbomb
Can any of the company-specific risk be diversified away by investing in both Nidec and Rosinbomb 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 Rosinbomb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nidec and Rosinbomb, you can compare the effects of market volatilities on Nidec and Rosinbomb 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 Rosinbomb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nidec and Rosinbomb.
Diversification Opportunities for Nidec and Rosinbomb
Very weak diversification
The 3 months correlation between Nidec and Rosinbomb is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Nidec and Rosinbomb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rosinbomb 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 Rosinbomb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rosinbomb has no effect on the direction of Nidec i.e., Nidec and Rosinbomb go up and down completely randomly.
Pair Corralation between Nidec and Rosinbomb
If you would invest 1.10 in Rosinbomb on November 2, 2024 and sell it today you would lose (0.43) from holding Rosinbomb or give up 39.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.96% |
| Values | Daily Returns |
Nidec vs. Rosinbomb
Performance |
| Timeline |
| Nidec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Rosinbomb |
Nidec and Rosinbomb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nidec and Rosinbomb
The main advantage of trading using opposite Nidec and Rosinbomb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nidec position performs unexpectedly, Rosinbomb 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 Rosinbomb will offset losses from the drop in Rosinbomb's long position.| Nidec vs. Daifuku Co | Nidec vs. Eaton PLC | Nidec vs. Yokogawa Electric Corp | Nidec vs. Vestas Wind Systems |
| Rosinbomb vs. Titan Logix Corp | Rosinbomb vs. Nel ASA | Rosinbomb vs. Weir Group PLC | Rosinbomb vs. Nel ASA |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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