Correlation Between NISSAN CHEMICAL and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both NISSAN CHEMICAL and Cogent Communications 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 Cogent Communications 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 Cogent Communications Holdings, you can compare the effects of market volatilities on NISSAN CHEMICAL and Cogent Communications 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 Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of NISSAN CHEMICAL and Cogent Communications.
Diversification Opportunities for NISSAN CHEMICAL and Cogent Communications
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NISSAN and Cogent is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding NISSAN CHEMICAL IND and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications 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 Cogent Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogent Communications has no effect on the direction of NISSAN CHEMICAL i.e., NISSAN CHEMICAL and Cogent Communications go up and down completely randomly.
Pair Corralation between NISSAN CHEMICAL and Cogent Communications
Assuming the 90 days trading horizon NISSAN CHEMICAL IND is expected to generate 0.62 times more return on investment than Cogent Communications. However, NISSAN CHEMICAL IND is 1.6 times less risky than Cogent Communications. It trades about -0.04 of its potential returns per unit of risk. Cogent Communications Holdings is currently generating about -0.12 per unit of risk. If you would invest 3,200 in NISSAN CHEMICAL IND on September 12, 2024 and sell it today you would lose (40.00) from holding NISSAN CHEMICAL IND or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
NISSAN CHEMICAL IND vs. Cogent Communications Holdings
Performance |
| Timeline |
| NISSAN CHEMICAL IND |
| Cogent Communications |
NISSAN CHEMICAL and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NISSAN CHEMICAL and Cogent Communications
The main advantage of trading using opposite NISSAN CHEMICAL and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NISSAN CHEMICAL position performs unexpectedly, Cogent Communications 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 Cogent Communications will offset losses from the drop in Cogent Communications' long position.| NISSAN CHEMICAL vs. Apple Inc | NISSAN CHEMICAL vs. Apple Inc | NISSAN CHEMICAL vs. Apple Inc | NISSAN CHEMICAL vs. Apple Inc |
| Cogent Communications vs. Superior Plus Corp | Cogent Communications vs. SIVERS SEMICONDUCTORS AB | Cogent Communications vs. Norsk Hydro ASA | Cogent Communications vs. Reliance Steel Aluminum |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |