Correlation Between NEXTDC and SEIKOH GIKEN

Can any of the company-specific risk be diversified away by investing in both NEXTDC and SEIKOH GIKEN 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 NEXTDC and SEIKOH GIKEN into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NEXTDC LTD and SEIKOH GIKEN Co, you can compare the effects of market volatilities on NEXTDC and SEIKOH GIKEN 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 NEXTDC with a short position of SEIKOH GIKEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXTDC and SEIKOH GIKEN.

Diversification Opportunities for NEXTDC and SEIKOH GIKEN

0.0

Correlation Coefficient

NEXTDC  SEIKOH GIKEN

Pay attention - limited upside

The 3 months correlation between NEXTDC and SEIKOH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NEXTDC LTD and SEIKOH GIKEN Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEIKOH GIKEN and NEXTDC 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 NEXTDC LTD are associated (or correlated) with SEIKOH GIKEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEIKOH GIKEN has no effect on the direction of NEXTDC i.e., NEXTDC and SEIKOH GIKEN go up and down completely randomly.

Pair Corralation between NEXTDC and SEIKOH GIKEN

If you would invest  640.00  in NEXTDC LTD on October 10, 2024 and sell it today you would earn a total of  275.00  from holding NEXTDC LTD or generate 42.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

NEXTDC LTD  vs.  SEIKOH GIKEN Co

NEXTDC LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NEXTDC LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

SEIKOH GIKEN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SEIKOH GIKEN Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, SEIKOH GIKEN is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with NEXTDC and SEIKOH GIKEN

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

The idea behind NEXTDC LTD and SEIKOH GIKEN Co 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.