Correlation Between Cytosorbents Crp and Nihon Kohden

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

By analyzing existing cross correlation between Cytosorbents Crp and Nihon Kohden Corp, you can compare the effects of market volatilities on Cytosorbents Crp and Nihon Kohden 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 Cytosorbents Crp with a short position of Nihon Kohden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cytosorbents Crp and Nihon Kohden.

Diversification Opportunities for Cytosorbents Crp and Nihon Kohden

0.18

Correlation Coefficient

Cytosorbents Crp  Nihon Kohden

Average diversification

The 3 months correlation between Cytosorbents and Nihon is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Cytosorbents Crp and Nihon Kohden Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nihon Kohden Corp and Cytosorbents Crp 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 Cytosorbents Crp are associated (or correlated) with Nihon Kohden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nihon Kohden Corp has no effect on the direction of Cytosorbents Crp i.e., Cytosorbents Crp and Nihon Kohden go up and down completely randomly.

Pair Corralation between Cytosorbents Crp and Nihon Kohden

Given the investment horizon of 90 days Cytosorbents Crp is expected to under-perform the Nihon Kohden. In addition to that, Cytosorbents Crp is 1.28 times more volatile than Nihon Kohden Corp. It trades about -0.11 of its total potential returns per unit of risk. Nihon Kohden Corp is currently generating about 0.04 per unit of volatility. If you would invest  1,456  in Nihon Kohden Corp on September 21, 2024 and sell it today you would earn a total of  59.00  from holding Nihon Kohden Corp or generate 4.05% return on investment over 90 days.

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

Cytosorbents Crp  vs.  Nihon Kohden Corp

Cytosorbents Crp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cytosorbents Crp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Nihon Kohden Corp

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nihon Kohden Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady forward-looking signals, Nihon Kohden may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cytosorbents Crp and Nihon Kohden

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

The idea behind Cytosorbents Crp and Nihon Kohden Corp 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..