Correlation Between NN and Chicago Rivet
Can any of the company-specific risk be diversified away by investing in both NN and Chicago Rivet 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 NN and Chicago Rivet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NN Inc and Chicago Rivet Machine, you can compare the effects of market volatilities on NN and Chicago Rivet 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 NN with a short position of Chicago Rivet. Check out your portfolio center. Please also check ongoing floating volatility patterns of NN and Chicago Rivet.
Diversification Opportunities for NN and Chicago Rivet
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between NN and Chicago is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding NN Inc and Chicago Rivet Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicago Rivet Machine and NN 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 NN Inc are associated (or correlated) with Chicago Rivet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicago Rivet Machine has no effect on the direction of NN i.e., NN and Chicago Rivet go up and down completely randomly.
Pair Corralation between NN and Chicago Rivet
Given the investment horizon of 90 days NN Inc is expected to under-perform the Chicago Rivet. In addition to that, NN is 1.04 times more volatile than Chicago Rivet Machine. It trades about -0.65 of its total potential returns per unit of risk. Chicago Rivet Machine is currently generating about -0.06 per unit of volatility. If you would invest 1,656 in Chicago Rivet Machine on January 23, 2024 and sell it today you would lose (38.00) from holding Chicago Rivet Machine or give up 2.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NN Inc vs. Chicago Rivet Machine
Performance |
| Timeline |
| NN Inc |
| Chicago Rivet Machine |
NN and Chicago Rivet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NN and Chicago Rivet
The main advantage of trading using opposite NN and Chicago Rivet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NN position performs unexpectedly, Chicago Rivet 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 Chicago Rivet will offset losses from the drop in Chicago Rivet's long position.| NN vs. Trinity Industries | NN vs. Freightcar America | NN vs. Westinghouse Air Brake | NN vs. Norfolk Southern |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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