Correlation Between NEP Realty and Ichitan Group

Can any of the company-specific risk be diversified away by investing in both NEP Realty and Ichitan Group 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 NEP Realty and Ichitan Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NEP Realty and and Ichitan Group Public, you can compare the effects of market volatilities on NEP Realty and Ichitan Group 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 NEP Realty with a short position of Ichitan Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEP Realty and Ichitan Group.

Diversification Opportunities for NEP Realty and Ichitan Group

-0.29

Correlation Coefficient

NEP Realty  Ichitan Group

Very good diversification

The 3 months correlation between NEP and Ichitan is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding NEP Realty and and Ichitan Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichitan Group Public and NEP Realty 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 NEP Realty and are associated (or correlated) with Ichitan Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichitan Group Public has no effect on the direction of NEP Realty i.e., NEP Realty and Ichitan Group go up and down completely randomly.

Pair Corralation between NEP Realty and Ichitan Group

Assuming the 90 days trading horizon NEP Realty and is expected to under-perform the Ichitan Group. In addition to that, NEP Realty is 1.17 times more volatile than Ichitan Group Public. It trades about -0.13 of its total potential returns per unit of risk. Ichitan Group Public is currently generating about 0.29 per unit of volatility. If you would invest  1,620  in Ichitan Group Public on February 6, 2024 and sell it today you would earn a total of  140.00  from holding Ichitan Group Public or generate 8.64% return on investment over 90 days.

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

NEP Realty and  vs.  Ichitan Group Public

NEP Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NEP Realty and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Ichitan Group Public

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ichitan Group Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Ichitan Group may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with NEP Realty and Ichitan Group

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

The idea behind NEP Realty and and Ichitan Group Public 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.