Correlation Between Nidec and Xinjiang Goldwind
Can any of the company-specific risk be diversified away by investing in both Nidec and Xinjiang Goldwind 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 Xinjiang Goldwind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nidec and Xinjiang Goldwind Science, you can compare the effects of market volatilities on Nidec and Xinjiang Goldwind 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 Xinjiang Goldwind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nidec and Xinjiang Goldwind.
Diversification Opportunities for Nidec and Xinjiang Goldwind
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nidec and Xinjiang is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Nidec and Xinjiang Goldwind Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Goldwind Science 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 Xinjiang Goldwind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Goldwind Science has no effect on the direction of Nidec i.e., Nidec and Xinjiang Goldwind go up and down completely randomly.
Pair Corralation between Nidec and Xinjiang Goldwind
Assuming the 90 days horizon Nidec is expected to generate 4.03 times more return on investment than Xinjiang Goldwind. However, Nidec is 4.03 times more volatile than Xinjiang Goldwind Science. It trades about 0.08 of its potential returns per unit of risk. Xinjiang Goldwind Science is currently generating about 0.08 per unit of risk. If you would invest 2,451 in Nidec on September 12, 2024 and sell it today you would lose (605.00) from holding Nidec or give up 24.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.4% |
| Values | Daily Returns |
Nidec vs. Xinjiang Goldwind Science
Performance |
| Timeline |
| Nidec |
| Xinjiang Goldwind Science |
Nidec and Xinjiang Goldwind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nidec and Xinjiang Goldwind
The main advantage of trading using opposite Nidec and Xinjiang Goldwind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nidec position performs unexpectedly, Xinjiang Goldwind 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 Xinjiang Goldwind will offset losses from the drop in Xinjiang Goldwind's long position.| Nidec vs. Xinjiang Goldwind Science | Nidec vs. American Superconductor | Nidec vs. Cummins | Nidec vs. Aquagold International |
| Xinjiang Goldwind vs. Shanghai Electric Group | Xinjiang Goldwind vs. American Superconductor | Xinjiang Goldwind vs. Cummins | Xinjiang Goldwind vs. Aquagold International |
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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