Correlation Between Nimir Industrial and Loads

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

By analyzing existing cross correlation between Nimir Industrial Chemical and Loads, you can compare the effects of market volatilities on Nimir Industrial and Loads 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 Nimir Industrial with a short position of Loads. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nimir Industrial and Loads.

Diversification Opportunities for Nimir Industrial and Loads

0.36

Correlation Coefficient

Nimir Industrial  Loads

Weak diversification

The 3 months correlation between Nimir and Loads is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Nimir Industrial Chemical and Loads in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loads and Nimir Industrial 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 Nimir Industrial Chemical are associated (or correlated) with Loads. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loads has no effect on the direction of Nimir Industrial i.e., Nimir Industrial and Loads go up and down completely randomly.

Pair Corralation between Nimir Industrial and Loads

Assuming the 90 days trading horizon Nimir Industrial is expected to generate 6.16 times less return on investment than Loads. But when comparing it to its historical volatility, Nimir Industrial Chemical is 1.31 times less risky than Loads. It trades about 0.02 of its potential returns per unit of risk. Loads is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,568  in Loads on December 22, 2024 and sell it today you would earn a total of  224.00  from holding Loads or generate 14.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Nimir Industrial Chemical  vs.  Loads

Nimir Industrial Chemical

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nimir Industrial Chemical are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Nimir Industrial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Loads

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Loads are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Loads disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nimir Industrial and Loads

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

The idea behind Nimir Industrial Chemical and Loads 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.

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 Global Correlations module to find global opportunities by holding instruments from different markets.