Correlation Between New Momentum and Nissan
Can any of the company-specific risk be diversified away by investing in both New Momentum and Nissan 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 New Momentum and Nissan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Momentum and Nissan Motor Co, you can compare the effects of market volatilities on New Momentum and Nissan 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 New Momentum with a short position of Nissan. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Momentum and Nissan.
Diversification Opportunities for New Momentum and Nissan
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between New and Nissan is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding New Momentum and Nissan Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nissan Motor and New Momentum 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 New Momentum are associated (or correlated) with Nissan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nissan Motor has no effect on the direction of New Momentum i.e., New Momentum and Nissan go up and down completely randomly.
Pair Corralation between New Momentum and Nissan
If you would invest 868.00 in Nissan Motor Co on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Nissan Motor Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 1.56% |
| Values | Daily Returns |
New Momentum vs. Nissan Motor Co
Performance |
| Timeline |
| New Momentum |
| Nissan Motor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
New Momentum and Nissan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Momentum and Nissan
The main advantage of trading using opposite New Momentum and Nissan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Momentum position performs unexpectedly, Nissan 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 Nissan will offset losses from the drop in Nissan's long position.| New Momentum vs. SosTravel SPA | New Momentum vs. Arma Services | New Momentum vs. Transat AT | New Momentum vs. Airbnb Inc |
| Nissan vs. Honda Motor Co | Nissan vs. Toyota Motor | Nissan vs. Hyundai Motor Co | Nissan vs. Bayerische Motoren Werke |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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