Correlation Between Nimir Industrial and Grays Leasing

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

By analyzing existing cross correlation between Nimir Industrial Chemical and Grays Leasing, you can compare the effects of market volatilities on Nimir Industrial and Grays Leasing 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 Nimir Industrial with a short position of Grays Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nimir Industrial and Grays Leasing.

Diversification Opportunities for Nimir Industrial and Grays Leasing

-0.1

Correlation Coefficient

Nimir Industrial  Grays Leasing

Good diversification

The 3 months correlation between Nimir and Grays is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Nimir Industrial Chemical and Grays Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grays Leasing and Nimir Industrial 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 Nimir Industrial Chemical are associated (or correlated) with Grays Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grays Leasing has no effect on the direction of Nimir Industrial i.e., Nimir Industrial and Grays Leasing go up and down completely randomly.

Pair Corralation between Nimir Industrial and Grays Leasing

Assuming the 90 days trading horizon Nimir Industrial Chemical is expected to generate 0.54 times more return on investment than Grays Leasing. However, Nimir Industrial Chemical is 1.86 times less risky than Grays Leasing. It trades about 0.12 of its potential returns per unit of risk. Grays Leasing is currently generating about 0.04 per unit of risk. If you would invest  12,140  in Nimir Industrial Chemical on September 12, 2024 and sell it today you would earn a total of  1,763  from holding Nimir Industrial Chemical or generate 14.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.94%
Values	Daily Returns

Nimir Industrial Chemical  vs.  Grays Leasing

Nimir Industrial Chemical

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nimir Industrial Chemical are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Nimir Industrial sustained solid returns over the last few months and may actually be approaching a breakup point.

Grays Leasing

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grays Leasing are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Grays Leasing may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Nimir Industrial and Grays Leasing

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

The idea behind Nimir Industrial Chemical and Grays Leasing 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.