Correlation Between Nissan and Ferrari NV
Can any of the company-specific risk be diversified away by investing in both Nissan and Ferrari NV 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 Nissan and Ferrari NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nissan Motor Co and Ferrari NV, you can compare the effects of market volatilities on Nissan and Ferrari NV 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 Nissan with a short position of Ferrari NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nissan and Ferrari NV.
Diversification Opportunities for Nissan and Ferrari NV
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nissan and Ferrari is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Nissan Motor Co and Ferrari NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferrari NV and Nissan 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 Nissan Motor Co are associated (or correlated) with Ferrari NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferrari NV has no effect on the direction of Nissan i.e., Nissan and Ferrari NV go up and down completely randomly.
Pair Corralation between Nissan and Ferrari NV
If you would invest 41,214 in Ferrari NV on August 24, 2024 and sell it today you would earn a total of 1,737 from holding Ferrari NV or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
Nissan Motor Co vs. Ferrari NV
Performance |
| Timeline |
| Nissan Motor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ferrari NV |
Nissan and Ferrari NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nissan and Ferrari NV
The main advantage of trading using opposite Nissan and Ferrari NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nissan position performs unexpectedly, Ferrari NV 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 Ferrari NV will offset losses from the drop in Ferrari NV's long position.| Nissan vs. Honda Motor Co | Nissan vs. Toyota Motor | Nissan vs. Hyundai Motor Co | Nissan vs. Bayerische Motoren Werke |
| Ferrari NV vs. Lucid Group | Ferrari NV vs. Rivian Automotive | Ferrari NV vs. Polestar Automotive Holding | Ferrari NV vs. Mullen Automotive |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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