Correlation Between NISSAN CHEMICAL and GOLD ROAD

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

By analyzing existing cross correlation between NISSAN CHEMICAL IND and GOLD ROAD RES, you can compare the effects of market volatilities on NISSAN CHEMICAL and GOLD ROAD 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 CHEMICAL with a short position of GOLD ROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of NISSAN CHEMICAL and GOLD ROAD.

Diversification Opportunities for NISSAN CHEMICAL and GOLD ROAD

-0.78

Correlation Coefficient

NISSAN CHEMICAL  GOLD ROAD

Pay attention - limited upside

The 3 months correlation between NISSAN and GOLD is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding NISSAN CHEMICAL IND and GOLD ROAD RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLD ROAD RES and NISSAN CHEMICAL 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 CHEMICAL IND are associated (or correlated) with GOLD ROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLD ROAD RES has no effect on the direction of NISSAN CHEMICAL i.e., NISSAN CHEMICAL and GOLD ROAD go up and down completely randomly.

Pair Corralation between NISSAN CHEMICAL and GOLD ROAD

Assuming the 90 days trading horizon NISSAN CHEMICAL IND is expected to generate 0.62 times more return on investment than GOLD ROAD. However, NISSAN CHEMICAL IND is 1.61 times less risky than GOLD ROAD. It trades about -0.12 of its potential returns per unit of risk. GOLD ROAD RES is currently generating about -0.08 per unit of risk. If you would invest  2,880  in NISSAN CHEMICAL IND on December 11, 2024 and sell it today you would lose (100.00) from holding NISSAN CHEMICAL IND or give up 3.47% of portfolio value over 90 days.

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

NISSAN CHEMICAL IND  vs.  GOLD ROAD RES

NISSAN CHEMICAL IND

Risk-Adjusted Performance

Very Weak

Over the last 90 days NISSAN CHEMICAL IND has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

GOLD ROAD RES

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GOLD ROAD RES are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, GOLD ROAD exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NISSAN CHEMICAL and GOLD ROAD

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

The idea behind NISSAN CHEMICAL IND and GOLD ROAD RES 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.