Correlation Between Nippon Steel and SQUIRREL MEDIA
Can any of the company-specific risk be diversified away by investing in both Nippon Steel and SQUIRREL MEDIA 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 Nippon Steel and SQUIRREL MEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nippon Steel and SQUIRREL MEDIA SA, you can compare the effects of market volatilities on Nippon Steel and SQUIRREL MEDIA 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 Nippon Steel with a short position of SQUIRREL MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nippon Steel and SQUIRREL MEDIA.
Diversification Opportunities for Nippon Steel and SQUIRREL MEDIA
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nippon and SQUIRREL is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Nippon Steel and SQUIRREL MEDIA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SQUIRREL MEDIA SA and Nippon Steel 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 Nippon Steel are associated (or correlated) with SQUIRREL MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SQUIRREL MEDIA SA has no effect on the direction of Nippon Steel i.e., Nippon Steel and SQUIRREL MEDIA go up and down completely randomly.
Pair Corralation between Nippon Steel and SQUIRREL MEDIA
Assuming the 90 days trading horizon Nippon Steel is expected to generate 0.8 times more return on investment than SQUIRREL MEDIA. However, Nippon Steel is 1.25 times less risky than SQUIRREL MEDIA. It trades about 0.03 of its potential returns per unit of risk. SQUIRREL MEDIA SA is currently generating about -0.03 per unit of risk. If you would invest 1,647 in Nippon Steel on October 31, 2024 and sell it today you would earn a total of 274.00 from holding Nippon Steel or generate 16.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nippon Steel vs. SQUIRREL MEDIA SA
Performance |
| Timeline |
| Nippon Steel |
| SQUIRREL MEDIA SA |
Nippon Steel and SQUIRREL MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nippon Steel and SQUIRREL MEDIA
The main advantage of trading using opposite Nippon Steel and SQUIRREL MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nippon Steel position performs unexpectedly, SQUIRREL MEDIA 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 SQUIRREL MEDIA will offset losses from the drop in SQUIRREL MEDIA's long position.| Nippon Steel vs. Apple Inc | Nippon Steel vs. Apple Inc | Nippon Steel vs. Apple Inc | Nippon Steel vs. Apple Inc |
| SQUIRREL MEDIA vs. Games Workshop Group | SQUIRREL MEDIA vs. AGNC INVESTMENT | SQUIRREL MEDIA vs. Apollo Investment Corp | SQUIRREL MEDIA vs. CHRYSALIS INVESTMENTS LTD |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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