Correlation Between Nippon Life and Electronics Mart
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By analyzing existing cross correlation between Nippon Life India and Electronics Mart India, you can compare the effects of market volatilities on Nippon Life and Electronics Mart 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 Nippon Life with a short position of Electronics Mart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nippon Life and Electronics Mart.
Diversification Opportunities for Nippon Life and Electronics Mart
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nippon and Electronics is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Nippon Life India and Electronics Mart India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronics Mart India and Nippon Life 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 Nippon Life India are associated (or correlated) with Electronics Mart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronics Mart India has no effect on the direction of Nippon Life i.e., Nippon Life and Electronics Mart go up and down completely randomly.
Pair Corralation between Nippon Life and Electronics Mart
Assuming the 90 days trading horizon Nippon Life India is expected to generate 0.89 times more return on investment than Electronics Mart. However, Nippon Life India is 1.12 times less risky than Electronics Mart. It trades about 0.06 of its potential returns per unit of risk. Electronics Mart India is currently generating about -0.08 per unit of risk. If you would invest 66,486 in Nippon Life India on September 8, 2024 and sell it today you would earn a total of 5,424 from holding Nippon Life India or generate 8.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Nippon Life India vs. Electronics Mart India
Performance |
Timeline |
Nippon Life India |
Electronics Mart India |
Nippon Life and Electronics Mart Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nippon Life and Electronics Mart
The main advantage of trading using opposite Nippon Life and Electronics Mart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nippon Life position performs unexpectedly, Electronics Mart 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 Electronics Mart will offset losses from the drop in Electronics Mart's long position.Nippon Life vs. Hindustan Construction | Nippon Life vs. MIC Electronics Limited | Nippon Life vs. Life Insurance | Nippon Life vs. Sportking India Limited |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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