Correlation Between Nissan and Mercedes-Benz Group

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

By analyzing existing cross correlation between Nissan Motor Co and Mercedes Benz Group AG, you can compare the effects of market volatilities on Nissan and Mercedes-Benz 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 Nissan with a short position of Mercedes-Benz Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nissan and Mercedes-Benz Group.

Diversification Opportunities for Nissan and Mercedes-Benz Group

0.0

Correlation Coefficient

Nissan  Mercedes-Benz Group

Pay attention - limited upside

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

Pair Corralation between Nissan and Mercedes-Benz Group

If you would invest  1,389  in Mercedes Benz Group AG on December 30, 2024 and sell it today you would earn a total of  113.00  from holding Mercedes Benz Group AG or generate 8.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Nissan Motor Co  vs.  Mercedes Benz Group AG

Nissan Motor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nissan Motor Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Nissan is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Mercedes Benz Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mercedes Benz Group AG are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Mercedes-Benz Group may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Nissan and Mercedes-Benz Group

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

The idea behind Nissan Motor Co and Mercedes Benz Group AG 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.