Correlation Between Nishi Nippon and PPHE HOTEL
Can any of the company-specific risk be diversified away by investing in both Nishi Nippon and PPHE HOTEL 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 Nishi Nippon and PPHE HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nishi Nippon Railroad Co and PPHE HOTEL GROUP, you can compare the effects of market volatilities on Nishi Nippon and PPHE HOTEL 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 Nishi Nippon with a short position of PPHE HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nishi Nippon and PPHE HOTEL.
Diversification Opportunities for Nishi Nippon and PPHE HOTEL
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nishi and PPHE is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Nishi Nippon Railroad Co and PPHE HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE HOTEL GROUP and Nishi Nippon 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 Nishi Nippon Railroad Co are associated (or correlated) with PPHE HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE HOTEL GROUP has no effect on the direction of Nishi Nippon i.e., Nishi Nippon and PPHE HOTEL go up and down completely randomly.
Pair Corralation between Nishi Nippon and PPHE HOTEL
Assuming the 90 days horizon Nishi Nippon Railroad Co is expected to generate 0.66 times more return on investment than PPHE HOTEL. However, Nishi Nippon Railroad Co is 1.52 times less risky than PPHE HOTEL. It trades about -0.2 of its potential returns per unit of risk. PPHE HOTEL GROUP is currently generating about -0.23 per unit of risk. If you would invest 1,380 in Nishi Nippon Railroad Co on October 26, 2024 and sell it today you would lose (80.00) from holding Nishi Nippon Railroad Co or give up 5.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nishi Nippon Railroad Co vs. PPHE HOTEL GROUP
Performance |
| Timeline |
| Nishi Nippon Railroad |
| PPHE HOTEL GROUP |
Nishi Nippon and PPHE HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nishi Nippon and PPHE HOTEL
The main advantage of trading using opposite Nishi Nippon and PPHE HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nishi Nippon position performs unexpectedly, PPHE HOTEL 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 PPHE HOTEL will offset losses from the drop in PPHE HOTEL's long position.| Nishi Nippon vs. Union Pacific | Nishi Nippon vs. Canadian National Railway | Nishi Nippon vs. CSX Corporation | Nishi Nippon vs. Norfolk Southern |
| PPHE HOTEL vs. CITY OFFICE REIT | PPHE HOTEL vs. Tower One Wireless | PPHE HOTEL vs. SLR Investment Corp | PPHE HOTEL vs. ECHO INVESTMENT ZY |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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