Correlation Between First Abacus and Monde Nissin

Can any of the company-specific risk be diversified away by investing in both First Abacus and Monde Nissin 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 First Abacus and Monde Nissin into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between First Abacus Financial and Monde Nissin Corp, you can compare the effects of market volatilities on First Abacus and Monde Nissin 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 First Abacus with a short position of Monde Nissin. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Abacus and Monde Nissin.

Diversification Opportunities for First Abacus and Monde Nissin

-0.4

Correlation Coefficient

First Abacus  Monde Nissin

Very good diversification

The 3 months correlation between First and Monde is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding First Abacus Financial and Monde Nissin Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monde Nissin Corp and First Abacus 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 First Abacus Financial are associated (or correlated) with Monde Nissin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monde Nissin Corp has no effect on the direction of First Abacus i.e., First Abacus and Monde Nissin go up and down completely randomly.

Pair Corralation between First Abacus and Monde Nissin

Assuming the 90 days trading horizon First Abacus Financial is expected to generate 1.92 times more return on investment than Monde Nissin. However, First Abacus is 1.92 times more volatile than Monde Nissin Corp. It trades about 0.17 of its potential returns per unit of risk. Monde Nissin Corp is currently generating about 0.02 per unit of risk. If you would invest  61.00  in First Abacus Financial on September 5, 2024 and sell it today you would earn a total of  8.00  from holding First Abacus Financial or generate 13.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	26.98%
Values	Daily Returns

First Abacus Financial  vs.  Monde Nissin Corp

First Abacus Financial

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days First Abacus Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather unsteady technical and fundamental indicators, First Abacus exhibited solid returns over the last few months and may actually be approaching a breakup point.

Monde Nissin Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Monde Nissin Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Monde Nissin is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with First Abacus and Monde Nissin

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

The idea behind First Abacus Financial and Monde Nissin Corp 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.