Correlation Between NIPPON STEEL and Calibre Mining
Can any of the company-specific risk be diversified away by investing in both NIPPON STEEL and Calibre Mining 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 Calibre Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NIPPON STEEL SPADR and Calibre Mining Corp, you can compare the effects of market volatilities on NIPPON STEEL and Calibre Mining 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 Calibre Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIPPON STEEL and Calibre Mining.
Diversification Opportunities for NIPPON STEEL and Calibre Mining
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between NIPPON and Calibre is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding NIPPON STEEL SPADR and Calibre Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calibre Mining Corp 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 SPADR are associated (or correlated) with Calibre Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calibre Mining Corp has no effect on the direction of NIPPON STEEL i.e., NIPPON STEEL and Calibre Mining go up and down completely randomly.
Pair Corralation between NIPPON STEEL and Calibre Mining
Assuming the 90 days trading horizon NIPPON STEEL SPADR is expected to generate 3.36 times more return on investment than Calibre Mining. However, NIPPON STEEL is 3.36 times more volatile than Calibre Mining Corp. It trades about 0.04 of its potential returns per unit of risk. Calibre Mining Corp is currently generating about 0.09 per unit of risk. If you would invest 474.00 in NIPPON STEEL SPADR on September 4, 2024 and sell it today you would earn a total of 141.00 from holding NIPPON STEEL SPADR or generate 29.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
NIPPON STEEL SPADR vs. Calibre Mining Corp
Performance |
| Timeline |
| NIPPON STEEL SPADR |
| Calibre Mining Corp |
NIPPON STEEL and Calibre Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIPPON STEEL and Calibre Mining
The main advantage of trading using opposite NIPPON STEEL and Calibre Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIPPON STEEL position performs unexpectedly, Calibre Mining 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 Calibre Mining will offset losses from the drop in Calibre Mining's long position.| NIPPON STEEL vs. Daito Trust Construction | NIPPON STEEL vs. HYDROFARM HLD GRP | NIPPON STEEL vs. Hanison Construction Holdings | NIPPON STEEL vs. Ultra Clean Holdings |
| Calibre Mining vs. Apple Inc | Calibre Mining vs. Apple Inc | Calibre Mining vs. Apple Inc | Calibre Mining vs. Apple Inc |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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