Correlation Between NISSAN CHEMICAL and SLR Investment
Can any of the company-specific risk be diversified away by investing in both NISSAN CHEMICAL and SLR Investment 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 SLR Investment 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 SLR Investment Corp, you can compare the effects of market volatilities on NISSAN CHEMICAL and SLR Investment 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 SLR Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of NISSAN CHEMICAL and SLR Investment.
Diversification Opportunities for NISSAN CHEMICAL and SLR Investment
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NISSAN and SLR is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding NISSAN CHEMICAL IND and SLR Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLR Investment Corp 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 SLR Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLR Investment Corp has no effect on the direction of NISSAN CHEMICAL i.e., NISSAN CHEMICAL and SLR Investment go up and down completely randomly.
Pair Corralation between NISSAN CHEMICAL and SLR Investment
Assuming the 90 days trading horizon NISSAN CHEMICAL is expected to generate 1.64 times less return on investment than SLR Investment. But when comparing it to its historical volatility, NISSAN CHEMICAL IND is 1.97 times less risky than SLR Investment. It trades about 0.33 of its potential returns per unit of risk. SLR Investment Corp is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,417 in SLR Investment Corp on August 29, 2024 and sell it today you would earn a total of 172.00 from holding SLR Investment Corp or generate 12.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
NISSAN CHEMICAL IND vs. SLR Investment Corp
Performance |
| Timeline |
| NISSAN CHEMICAL IND |
| SLR Investment Corp |
NISSAN CHEMICAL and SLR Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NISSAN CHEMICAL and SLR Investment
The main advantage of trading using opposite NISSAN CHEMICAL and SLR Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NISSAN CHEMICAL position performs unexpectedly, SLR Investment 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 SLR Investment will offset losses from the drop in SLR Investment's long position.| NISSAN CHEMICAL vs. Cass Information Systems | NISSAN CHEMICAL vs. MICRONIC MYDATA | NISSAN CHEMICAL vs. Fidelity National Information | NISSAN CHEMICAL vs. National Storage Affiliates |
| SLR Investment vs. Axcelis Technologies | SLR Investment vs. SOFI TECHNOLOGIES | SLR Investment vs. Data3 Limited | SLR Investment vs. INFORMATION SVC GRP |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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