Correlation Between Nishi Nippon and HUT 8
Can any of the company-specific risk be diversified away by investing in both Nishi Nippon and HUT 8 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 HUT 8 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 HUT 8 P, you can compare the effects of market volatilities on Nishi Nippon and HUT 8 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 HUT 8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nishi Nippon and HUT 8.
Diversification Opportunities for Nishi Nippon and HUT 8
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nishi and HUT is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Nishi Nippon Railroad Co and HUT 8 P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUT 8 P 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 HUT 8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUT 8 P has no effect on the direction of Nishi Nippon i.e., Nishi Nippon and HUT 8 go up and down completely randomly.
Pair Corralation between Nishi Nippon and HUT 8
Assuming the 90 days horizon Nishi Nippon is expected to generate 7.96 times less return on investment than HUT 8. But when comparing it to its historical volatility, Nishi Nippon Railroad Co is 3.98 times less risky than HUT 8. It trades about 0.2 of its potential returns per unit of risk. HUT 8 P is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 1,490 in HUT 8 P on September 1, 2024 and sell it today you would earn a total of 1,180 from holding HUT 8 P or generate 79.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nishi Nippon Railroad Co vs. HUT 8 P
Performance |
| Timeline |
| Nishi Nippon Railroad |
| HUT 8 P |
Nishi Nippon and HUT 8 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nishi Nippon and HUT 8
The main advantage of trading using opposite Nishi Nippon and HUT 8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nishi Nippon position performs unexpectedly, HUT 8 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 HUT 8 will offset losses from the drop in HUT 8's long position.| Nishi Nippon vs. Union Pacific | Nishi Nippon vs. Superior Plus Corp | Nishi Nippon vs. NMI Holdings | Nishi Nippon vs. Origin Agritech |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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