Correlation Between Nikon Corp and Acushnet Holdings
Can any of the company-specific risk be diversified away by investing in both Nikon Corp and Acushnet Holdings 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 Nikon Corp and Acushnet Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nikon Corp and Acushnet Holdings Corp, you can compare the effects of market volatilities on Nikon Corp and Acushnet Holdings 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 Nikon Corp with a short position of Acushnet Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nikon Corp and Acushnet Holdings.
Diversification Opportunities for Nikon Corp and Acushnet Holdings
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nikon and Acushnet is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Nikon Corp and Acushnet Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acushnet Holdings Corp and Nikon Corp 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 Nikon Corp are associated (or correlated) with Acushnet Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acushnet Holdings Corp has no effect on the direction of Nikon Corp i.e., Nikon Corp and Acushnet Holdings go up and down completely randomly.
Pair Corralation between Nikon Corp and Acushnet Holdings
Assuming the 90 days horizon Nikon Corp is expected to generate 1.41 times more return on investment than Acushnet Holdings. However, Nikon Corp is 1.41 times more volatile than Acushnet Holdings Corp. It trades about -0.04 of its potential returns per unit of risk. Acushnet Holdings Corp is currently generating about -0.12 per unit of risk. If you would invest 1,135 in Nikon Corp on December 4, 2024 and sell it today you would lose (100.00) from holding Nikon Corp or give up 8.81% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Nikon Corp vs. Acushnet Holdings Corp
Performance |
Timeline |
Nikon Corp |
Acushnet Holdings Corp |
Nikon Corp and Acushnet Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nikon Corp and Acushnet Holdings
The main advantage of trading using opposite Nikon Corp and Acushnet Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nikon Corp position performs unexpectedly, Acushnet Holdings 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 Acushnet Holdings will offset losses from the drop in Acushnet Holdings' long position.Nikon Corp vs. Yamaha Corp DRC | Nikon Corp vs. Planet Fitness | Nikon Corp vs. Plby Group | Nikon Corp vs. Shimano Inc ADR |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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