Correlation Between Tradegate and NISSAN CHEMICAL
Can any of the company-specific risk be diversified away by investing in both Tradegate and NISSAN CHEMICAL 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 Tradegate and NISSAN CHEMICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tradegate AG Wertpapierhandelsbank and NISSAN CHEMICAL IND, you can compare the effects of market volatilities on Tradegate and NISSAN CHEMICAL 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 Tradegate with a short position of NISSAN CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradegate and NISSAN CHEMICAL.
Diversification Opportunities for Tradegate and NISSAN CHEMICAL
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tradegate and NISSAN is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Tradegate AG Wertpapierhandels and NISSAN CHEMICAL IND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISSAN CHEMICAL IND and Tradegate 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 Tradegate AG Wertpapierhandelsbank are associated (or correlated) with NISSAN CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISSAN CHEMICAL IND has no effect on the direction of Tradegate i.e., Tradegate and NISSAN CHEMICAL go up and down completely randomly.
Pair Corralation between Tradegate and NISSAN CHEMICAL
Assuming the 90 days horizon Tradegate AG Wertpapierhandelsbank is expected to under-perform the NISSAN CHEMICAL. But the stock apears to be less risky and, when comparing its historical volatility, Tradegate AG Wertpapierhandelsbank is 1.28 times less risky than NISSAN CHEMICAL. The stock trades about -0.05 of its potential returns per unit of risk. The NISSAN CHEMICAL IND is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 3,400 in NISSAN CHEMICAL IND on September 14, 2024 and sell it today you would lose (280.00) from holding NISSAN CHEMICAL IND or give up 8.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
Tradegate AG Wertpapierhandels vs. NISSAN CHEMICAL IND
Performance |
| Timeline |
| Tradegate AG Wertpap |
| NISSAN CHEMICAL IND |
Tradegate and NISSAN CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tradegate and NISSAN CHEMICAL
The main advantage of trading using opposite Tradegate and NISSAN CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradegate position performs unexpectedly, NISSAN CHEMICAL 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 CHEMICAL will offset losses from the drop in NISSAN CHEMICAL's long position.| Tradegate vs. Superior Plus Corp | Tradegate vs. SIVERS SEMICONDUCTORS AB | Tradegate vs. CHINA HUARONG ENERHD 50 | Tradegate vs. NORDIC HALIBUT AS |
| NISSAN CHEMICAL vs. Apple Inc | NISSAN CHEMICAL vs. Apple Inc | NISSAN CHEMICAL vs. Apple Inc | NISSAN CHEMICAL vs. Apple Inc |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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