Correlation Between Nissan Chemical and Apple

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

By analyzing existing cross correlation between Nissan Chemical Corp and Apple Inc, you can compare the effects of market volatilities on Nissan Chemical and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nissan Chemical and Apple.

Diversification Opportunities for Nissan Chemical and Apple

0.05

Correlation Coefficient

Nissan Chemical  Apple

Significant diversification

The 3 months correlation between Nissan and Apple is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Nissan Chemical Corp and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Corp are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Nissan Chemical i.e., Nissan Chemical and Apple go up and down completely randomly.

Pair Corralation between Nissan Chemical and Apple

Assuming the 90 days trading horizon Nissan Chemical Corp is expected to under-perform the Apple. But the stock apears to be less risky and, when comparing its historical volatility, Nissan Chemical Corp is 1.17 times less risky than Apple. The stock trades about -0.19 of its potential returns per unit of risk. The Apple Inc is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  22,041  in Apple Inc on December 4, 2024 and sell it today you would earn a total of  924.00  from holding Apple Inc or generate 4.19% return on investment over 90 days.

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

Nissan Chemical Corp  vs.  Apple Inc

Nissan Chemical Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nissan Chemical Corp 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 basic 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.

Apple Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Apple 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 Nissan Chemical and Apple

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

The idea behind Nissan Chemical Corp and Apple Inc 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.