Correlation Between NISSAN CHEMICAL and China Mobile
Can any of the company-specific risk be diversified away by investing in both NISSAN CHEMICAL and China Mobile 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 CHEMICAL and China Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NISSAN CHEMICAL IND and China Mobile Limited, you can compare the effects of market volatilities on NISSAN CHEMICAL and China Mobile 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 CHEMICAL with a short position of China Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of NISSAN CHEMICAL and China Mobile.
Diversification Opportunities for NISSAN CHEMICAL and China Mobile
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NISSAN and China is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding NISSAN CHEMICAL IND and China Mobile Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Mobile Limited and NISSAN CHEMICAL 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 CHEMICAL IND are associated (or correlated) with China Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Mobile Limited has no effect on the direction of NISSAN CHEMICAL i.e., NISSAN CHEMICAL and China Mobile go up and down completely randomly.
Pair Corralation between NISSAN CHEMICAL and China Mobile
Assuming the 90 days trading horizon NISSAN CHEMICAL is expected to generate 14.86 times less return on investment than China Mobile. But when comparing it to its historical volatility, NISSAN CHEMICAL IND is 2.15 times less risky than China Mobile. It trades about 0.02 of its potential returns per unit of risk. China Mobile Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 429.00 in China Mobile Limited on September 3, 2024 and sell it today you would earn a total of 427.00 from holding China Mobile Limited or generate 99.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.34% |
| Values | Daily Returns |
NISSAN CHEMICAL IND vs. China Mobile Limited
Performance |
| Timeline |
| NISSAN CHEMICAL IND |
| China Mobile Limited |
NISSAN CHEMICAL and China Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NISSAN CHEMICAL and China Mobile
The main advantage of trading using opposite NISSAN CHEMICAL and China Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NISSAN CHEMICAL position performs unexpectedly, China Mobile 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 China Mobile will offset losses from the drop in China Mobile's long position.| NISSAN CHEMICAL vs. TOTAL GABON | NISSAN CHEMICAL vs. Walgreens Boots Alliance | NISSAN CHEMICAL vs. Peak Resources Limited |
| China Mobile vs. NISSAN CHEMICAL IND | China Mobile vs. Hyatt Hotels | China Mobile vs. Westlake Chemical | China Mobile vs. MELIA HOTELS |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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