Correlation Between NISSAN CHEMICAL and NORDSTROM
Can any of the company-specific risk be diversified away by investing in both NISSAN CHEMICAL and NORDSTROM 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 NORDSTROM 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 NORDSTROM Dusseldorf, you can compare the effects of market volatilities on NISSAN CHEMICAL and NORDSTROM 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 NORDSTROM. Check out your portfolio center. Please also check ongoing floating volatility patterns of NISSAN CHEMICAL and NORDSTROM.
Diversification Opportunities for NISSAN CHEMICAL and NORDSTROM
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NISSAN and NORDSTROM is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding NISSAN CHEMICAL IND and NORDSTROM Dusseldorf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORDSTROM Dusseldorf 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 NORDSTROM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORDSTROM Dusseldorf has no effect on the direction of NISSAN CHEMICAL i.e., NISSAN CHEMICAL and NORDSTROM go up and down completely randomly.
Pair Corralation between NISSAN CHEMICAL and NORDSTROM
Assuming the 90 days trading horizon NISSAN CHEMICAL IND is expected to generate 0.43 times more return on investment than NORDSTROM. However, NISSAN CHEMICAL IND is 2.33 times less risky than NORDSTROM. It trades about 0.12 of its potential returns per unit of risk. NORDSTROM Dusseldorf is currently generating about -0.01 per unit of risk. If you would invest 3,120 in NISSAN CHEMICAL IND on August 31, 2024 and sell it today you would earn a total of 100.00 from holding NISSAN CHEMICAL IND or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
NISSAN CHEMICAL IND vs. NORDSTROM Dusseldorf
Performance |
| Timeline |
| NISSAN CHEMICAL IND |
| NORDSTROM Dusseldorf |
NISSAN CHEMICAL and NORDSTROM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NISSAN CHEMICAL and NORDSTROM
The main advantage of trading using opposite NISSAN CHEMICAL and NORDSTROM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NISSAN CHEMICAL position performs unexpectedly, NORDSTROM 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 NORDSTROM will offset losses from the drop in NORDSTROM's long position.| NISSAN CHEMICAL vs. SIVERS SEMICONDUCTORS AB | NISSAN CHEMICAL vs. Darden Restaurants | NISSAN CHEMICAL vs. Reliance Steel Aluminum | NISSAN CHEMICAL vs. Q2M Managementberatung AG |
| NORDSTROM vs. Sumitomo Chemical | NORDSTROM vs. SCANDMEDICAL SOLDK 040 | NORDSTROM vs. NISSAN CHEMICAL IND | NORDSTROM vs. MeVis Medical Solutions |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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