Correlation Between NIKKON HOLDINGS and SINGAPORE POST

Can any of the company-specific risk be diversified away by investing in both NIKKON HOLDINGS and SINGAPORE POST 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 SINGAPORE POST 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 SINGAPORE POST, you can compare the effects of market volatilities on NIKKON HOLDINGS and SINGAPORE POST 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 SINGAPORE POST. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIKKON HOLDINGS and SINGAPORE POST.

Diversification Opportunities for NIKKON HOLDINGS and SINGAPORE POST

0.29

Correlation Coefficient

NIKKON HOLDINGS  SINGAPORE POST

Modest diversification

The 3 months correlation between NIKKON and SINGAPORE is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding NIKKON HOLDINGS TD and SINGAPORE POST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINGAPORE POST 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 SINGAPORE POST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SINGAPORE POST has no effect on the direction of NIKKON HOLDINGS i.e., NIKKON HOLDINGS and SINGAPORE POST go up and down completely randomly.

Pair Corralation between NIKKON HOLDINGS and SINGAPORE POST

Assuming the 90 days horizon NIKKON HOLDINGS TD is expected to generate 0.97 times more return on investment than SINGAPORE POST. However, NIKKON HOLDINGS TD is 1.03 times less risky than SINGAPORE POST. It trades about 0.29 of its potential returns per unit of risk. SINGAPORE POST is currently generating about 0.1 per unit of risk. If you would invest  1,210  in NIKKON HOLDINGS TD on December 28, 2024 and sell it today you would earn a total of  430.00  from holding NIKKON HOLDINGS TD or generate 35.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

NIKKON HOLDINGS TD  vs.  SINGAPORE POST

NIKKON HOLDINGS TD

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NIKKON HOLDINGS TD are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, NIKKON HOLDINGS reported solid returns over the last few months and may actually be approaching a breakup point.

SINGAPORE POST

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SINGAPORE POST are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, SINGAPORE POST may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with NIKKON HOLDINGS and SINGAPORE POST

The main advantage of trading using opposite NIKKON HOLDINGS and SINGAPORE POST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIKKON HOLDINGS position performs unexpectedly, SINGAPORE POST 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 SINGAPORE POST will offset losses from the drop in SINGAPORE POST's long position.

The idea behind NIKKON HOLDINGS TD and SINGAPORE POST pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..