Correlation Between PICKN PAY and Nippon Light
Can any of the company-specific risk be diversified away by investing in both PICKN PAY and Nippon Light 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 PICKN PAY and Nippon Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PICKN PAY STORES and Nippon Light Metal, you can compare the effects of market volatilities on PICKN PAY and Nippon Light 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 PICKN PAY with a short position of Nippon Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICKN PAY and Nippon Light.
Diversification Opportunities for PICKN PAY and Nippon Light
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between PICKN and Nippon is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding PICKN PAY STORES and Nippon Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Light Metal and PICKN PAY 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 PICKN PAY STORES are associated (or correlated) with Nippon Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Light Metal has no effect on the direction of PICKN PAY i.e., PICKN PAY and Nippon Light go up and down completely randomly.
Pair Corralation between PICKN PAY and Nippon Light
Assuming the 90 days trading horizon PICKN PAY STORES is expected to under-perform the Nippon Light. In addition to that, PICKN PAY is 1.49 times more volatile than Nippon Light Metal. It trades about -0.16 of its total potential returns per unit of risk. Nippon Light Metal is currently generating about 0.16 per unit of volatility. If you would invest 930.00 in Nippon Light Metal on November 7, 2024 and sell it today you would earn a total of 50.00 from holding Nippon Light Metal or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PICKN PAY STORES vs. Nippon Light Metal
Performance |
| Timeline |
| PICKN PAY STORES |
| Nippon Light Metal |
PICKN PAY and Nippon Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PICKN PAY and Nippon Light
The main advantage of trading using opposite PICKN PAY and Nippon Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PICKN PAY position performs unexpectedly, Nippon Light 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 Nippon Light will offset losses from the drop in Nippon Light's long position.| PICKN PAY vs. Titan Machinery | PICKN PAY vs. De Grey Mining | PICKN PAY vs. Harmony Gold Mining | PICKN PAY vs. Perseus Mining Limited |
| Nippon Light vs. FIREWEED METALS P | Nippon Light vs. Eidesvik Offshore ASA | Nippon Light vs. PARKEN Sport Entertainment | Nippon Light vs. WT OFFSHORE |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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