Correlation Between Nidec and Shanghai Electric
Can any of the company-specific risk be diversified away by investing in both Nidec and Shanghai Electric 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 Shanghai Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nidec and Shanghai Electric Group, you can compare the effects of market volatilities on Nidec and Shanghai Electric 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 Shanghai Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nidec and Shanghai Electric.
Diversification Opportunities for Nidec and Shanghai Electric
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nidec and Shanghai is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Nidec and Shanghai Electric Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Electric 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 Shanghai Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Electric has no effect on the direction of Nidec i.e., Nidec and Shanghai Electric go up and down completely randomly.
Pair Corralation between Nidec and Shanghai Electric
If you would invest 654.00 in Shanghai Electric Group on September 1, 2024 and sell it today you would earn a total of 56.00 from holding Shanghai Electric Group or generate 8.56% 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. Shanghai Electric Group
Performance |
Timeline |
Nidec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shanghai Electric |
Nidec and Shanghai Electric Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nidec and Shanghai Electric
The main advantage of trading using opposite Nidec and Shanghai Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nidec position performs unexpectedly, Shanghai Electric 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 Shanghai Electric will offset losses from the drop in Shanghai Electric's long position.Nidec vs. Daifuku Co | Nidec vs. Eaton PLC | Nidec vs. Yokogawa Electric Corp | Nidec vs. Brewbilt Manufacturing |
Shanghai Electric vs. Xinjiang Goldwind Science | Shanghai Electric vs. American Superconductor | Shanghai Electric vs. Cummins |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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