Correlation Between Nucletron Electronic and Johnson Matthey

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

By analyzing existing cross correlation between Nucletron Electronic Aktiengesellschaft and Johnson Matthey PLC, you can compare the effects of market volatilities on Nucletron Electronic and Johnson Matthey 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 Nucletron Electronic with a short position of Johnson Matthey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nucletron Electronic and Johnson Matthey.

Diversification Opportunities for Nucletron Electronic and Johnson Matthey

0.0

Correlation Coefficient

Nucletron Electronic  Johnson Matthey

Pay attention - limited upside

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

Pair Corralation between Nucletron Electronic and Johnson Matthey

If you would invest  1,580  in Johnson Matthey PLC on December 22, 2024 and sell it today you would earn a total of  49.00  from holding Johnson Matthey PLC or generate 3.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Nucletron Electronic Aktienges  vs.  Johnson Matthey PLC

Nucletron Electronic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nucletron Electronic Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Nucletron Electronic is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Johnson Matthey PLC

Risk-Adjusted Performance

Insignificant

Over the last 90 days Johnson Matthey PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Johnson Matthey is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Nucletron Electronic and Johnson Matthey

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

The idea behind Nucletron Electronic Aktiengesellschaft and Johnson Matthey PLC 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..