Correlation Between Polyram Plastic and Nissan
Can any of the company-specific risk be diversified away by investing in both Polyram Plastic and Nissan 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 Polyram Plastic and Nissan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polyram Plastic Industries and Nissan, you can compare the effects of market volatilities on Polyram Plastic and Nissan 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 Polyram Plastic with a short position of Nissan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polyram Plastic and Nissan.
Diversification Opportunities for Polyram Plastic and Nissan
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Polyram and Nissan is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Polyram Plastic Industries and Nissan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nissan and Polyram Plastic 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 Polyram Plastic Industries are associated (or correlated) with Nissan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nissan has no effect on the direction of Polyram Plastic i.e., Polyram Plastic and Nissan go up and down completely randomly.
Pair Corralation between Polyram Plastic and Nissan
Assuming the 90 days trading horizon Polyram Plastic Industries is expected to generate 0.61 times more return on investment than Nissan. However, Polyram Plastic Industries is 1.64 times less risky than Nissan. It trades about 0.26 of its potential returns per unit of risk. Nissan is currently generating about 0.06 per unit of risk. If you would invest 110,713 in Polyram Plastic Industries on September 5, 2024 and sell it today you would earn a total of 25,287 from holding Polyram Plastic Industries or generate 22.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polyram Plastic Industries vs. Nissan
Performance |
| Timeline |
| Polyram Plastic Indu |
| Nissan |
Polyram Plastic and Nissan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polyram Plastic and Nissan
The main advantage of trading using opposite Polyram Plastic and Nissan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polyram Plastic position performs unexpectedly, Nissan 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 Nissan will offset losses from the drop in Nissan's long position.| Polyram Plastic vs. Adgar Investments and | Polyram Plastic vs. ICL Israel Chemicals | Polyram Plastic vs. Arad Investment Industrial | Polyram Plastic vs. Ram On Investments and |
| Nissan vs. Shagrir Group Vehicle | Nissan vs. Retailors | Nissan vs. Polyram Plastic Industries | Nissan vs. Israel Discount Bank |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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