This module allows you to analyze existing cross correlation between NQPH and NIKKEI 225. You can compare the effects of market volatilities on NQPH and NIKKEI 225 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 NQPH with a short position of NIKKEI 225. See also your portfolio center. Please also check ongoing floating volatility patterns of NQPH and NIKKEI 225.
Assuming 30 trading days horizon, NQPH is expected to generate 1.38 times more return on investment than NIKKEI 225. However, NQPH is 1.38 times more volatile than NIKKEI 225. It trades about 0.16 of its potential returns per unit of risk. NIKKEI 225 is currently generating about 0.0 per unit of risk. If you would invest 95,211 in NQPH on June 21, 2018 and sell it today you would earn a total of 3,558 from holding NQPH or generate 3.74% return on investment over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding NQPH and NIKKEI 225 in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on NIKKEI 225 and NQPH 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 NQPH are associated (or correlated) with NIKKEI 225. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIKKEI 225 has no effect on the direction of NQPH i.e. NQPH and NIKKEI 225 go up and down completely randomly.
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