Correlation Between NIKKON HOLDINGS and SENKO GROUP
Can any of the company-specific risk be diversified away by investing in both NIKKON HOLDINGS and SENKO GROUP 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 NIKKON HOLDINGS and SENKO GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NIKKON HOLDINGS TD and SENKO GROUP HOLDINGS, you can compare the effects of market volatilities on NIKKON HOLDINGS and SENKO GROUP 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 NIKKON HOLDINGS with a short position of SENKO GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIKKON HOLDINGS and SENKO GROUP.
Diversification Opportunities for NIKKON HOLDINGS and SENKO GROUP
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NIKKON and SENKO is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding NIKKON HOLDINGS TD and SENKO GROUP HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENKO GROUP HOLDINGS and NIKKON HOLDINGS 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 NIKKON HOLDINGS TD are associated (or correlated) with SENKO GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENKO GROUP HOLDINGS has no effect on the direction of NIKKON HOLDINGS i.e., NIKKON HOLDINGS and SENKO GROUP go up and down completely randomly.
Pair Corralation between NIKKON HOLDINGS and SENKO GROUP
Assuming the 90 days horizon NIKKON HOLDINGS TD is expected to generate 1.05 times more return on investment than SENKO GROUP. However, NIKKON HOLDINGS is 1.05 times more volatile than SENKO GROUP HOLDINGS. It trades about 0.06 of its potential returns per unit of risk. SENKO GROUP HOLDINGS is currently generating about 0.05 per unit of risk. If you would invest 830.00 in NIKKON HOLDINGS TD on September 24, 2024 and sell it today you would earn a total of 380.00 from holding NIKKON HOLDINGS TD or generate 45.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
NIKKON HOLDINGS TD vs. SENKO GROUP HOLDINGS
Performance |
Timeline |
NIKKON HOLDINGS TD |
SENKO GROUP HOLDINGS |
NIKKON HOLDINGS and SENKO GROUP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NIKKON HOLDINGS and SENKO GROUP
The main advantage of trading using opposite NIKKON HOLDINGS and SENKO GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIKKON HOLDINGS position performs unexpectedly, SENKO GROUP 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 SENKO GROUP will offset losses from the drop in SENKO GROUP's long position.NIKKON HOLDINGS vs. Kuehne Nagel International | NIKKON HOLDINGS vs. ZTO EXPRESS | NIKKON HOLDINGS vs. SENKO GROUP HOLDINGS | NIKKON HOLDINGS vs. NTG Nordic Transport |
SENKO GROUP vs. Kuehne Nagel International | SENKO GROUP vs. ZTO EXPRESS | SENKO GROUP vs. NIKKON HOLDINGS TD | SENKO GROUP vs. NTG Nordic Transport |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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