Correlation Between NISSAN CHEMICAL and Grammer AG
Can any of the company-specific risk be diversified away by investing in both NISSAN CHEMICAL and Grammer AG 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 Grammer AG 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 Grammer AG, you can compare the effects of market volatilities on NISSAN CHEMICAL and Grammer AG 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 Grammer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of NISSAN CHEMICAL and Grammer AG.
Diversification Opportunities for NISSAN CHEMICAL and Grammer AG
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NISSAN and Grammer is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding NISSAN CHEMICAL IND and Grammer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grammer AG 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 Grammer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grammer AG has no effect on the direction of NISSAN CHEMICAL i.e., NISSAN CHEMICAL and Grammer AG go up and down completely randomly.
Pair Corralation between NISSAN CHEMICAL and Grammer AG
Assuming the 90 days trading horizon NISSAN CHEMICAL IND is expected to generate 0.45 times more return on investment than Grammer AG. However, NISSAN CHEMICAL IND is 2.22 times less risky than Grammer AG. It trades about -0.14 of its potential returns per unit of risk. Grammer AG is currently generating about -0.22 per unit of risk. If you would invest 3,240 in NISSAN CHEMICAL IND on September 15, 2024 and sell it today you would lose (120.00) from holding NISSAN CHEMICAL IND or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NISSAN CHEMICAL IND vs. Grammer AG
Performance |
| Timeline |
| NISSAN CHEMICAL IND |
| Grammer AG |
NISSAN CHEMICAL and Grammer AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NISSAN CHEMICAL and Grammer AG
The main advantage of trading using opposite NISSAN CHEMICAL and Grammer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NISSAN CHEMICAL position performs unexpectedly, Grammer AG 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 Grammer AG will offset losses from the drop in Grammer AG's long position.| NISSAN CHEMICAL vs. Apple Inc | NISSAN CHEMICAL vs. Apple Inc | NISSAN CHEMICAL vs. Apple Inc | NISSAN CHEMICAL vs. Apple Inc |
| Grammer AG vs. CHEMICAL INDUSTRIES | Grammer AG vs. Mitsubishi Gas Chemical | Grammer AG vs. NISSAN CHEMICAL IND | Grammer AG vs. Siamgas And Petrochemicals |
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 Correlations module to find global opportunities by holding instruments from different markets.
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