Correlation Between NIKKON HOLDINGS and Nomad Foods
Can any of the company-specific risk be diversified away by investing in both NIKKON HOLDINGS and Nomad Foods 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 NIKKON HOLDINGS and Nomad Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NIKKON HOLDINGS TD and Nomad Foods, you can compare the effects of market volatilities on NIKKON HOLDINGS and Nomad Foods 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 NIKKON HOLDINGS with a short position of Nomad Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIKKON HOLDINGS and Nomad Foods.
Diversification Opportunities for NIKKON HOLDINGS and Nomad Foods
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NIKKON and Nomad is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding NIKKON HOLDINGS TD and Nomad Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nomad Foods and NIKKON HOLDINGS 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 NIKKON HOLDINGS TD are associated (or correlated) with Nomad Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nomad Foods has no effect on the direction of NIKKON HOLDINGS i.e., NIKKON HOLDINGS and Nomad Foods go up and down completely randomly.
Pair Corralation between NIKKON HOLDINGS and Nomad Foods
Assuming the 90 days horizon NIKKON HOLDINGS TD is expected to generate 0.62 times more return on investment than Nomad Foods. However, NIKKON HOLDINGS TD is 1.61 times less risky than Nomad Foods. It trades about 0.11 of its potential returns per unit of risk. Nomad Foods is currently generating about -0.07 per unit of risk. If you would invest 1,180 in NIKKON HOLDINGS TD on September 24, 2024 and sell it today you would earn a total of 30.00 from holding NIKKON HOLDINGS TD or generate 2.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
NIKKON HOLDINGS TD vs. Nomad Foods
Performance |
Timeline |
NIKKON HOLDINGS TD |
Nomad Foods |
NIKKON HOLDINGS and Nomad Foods Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NIKKON HOLDINGS and Nomad Foods
The main advantage of trading using opposite NIKKON HOLDINGS and Nomad Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIKKON HOLDINGS position performs unexpectedly, Nomad Foods 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 Nomad Foods will offset losses from the drop in Nomad Foods' long position.NIKKON HOLDINGS vs. Kuehne Nagel International | NIKKON HOLDINGS vs. ZTO EXPRESS | NIKKON HOLDINGS vs. SENKO GROUP HOLDINGS | NIKKON HOLDINGS vs. NTG Nordic Transport |
Nomad Foods vs. Apple Inc | Nomad Foods vs. Apple Inc | Nomad Foods vs. Apple Inc | Nomad Foods vs. Apple Inc |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |