Correlation Between Nomad Foods and COFCO Joycome
Can any of the company-specific risk be diversified away by investing in both Nomad Foods and COFCO Joycome 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 Nomad Foods and COFCO Joycome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomad Foods and COFCO Joycome Foods, you can compare the effects of market volatilities on Nomad Foods and COFCO Joycome 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 Nomad Foods with a short position of COFCO Joycome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomad Foods and COFCO Joycome.
Diversification Opportunities for Nomad Foods and COFCO Joycome
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nomad and COFCO is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Nomad Foods and COFCO Joycome Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFCO Joycome Foods and Nomad Foods 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 Nomad Foods are associated (or correlated) with COFCO Joycome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFCO Joycome Foods has no effect on the direction of Nomad Foods i.e., Nomad Foods and COFCO Joycome go up and down completely randomly.
Pair Corralation between Nomad Foods and COFCO Joycome
Assuming the 90 days trading horizon Nomad Foods is expected to under-perform the COFCO Joycome. But the stock apears to be less risky and, when comparing its historical volatility, Nomad Foods is 1.66 times less risky than COFCO Joycome. The stock trades about -0.07 of its potential returns per unit of risk. The COFCO Joycome Foods is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 16.00 in COFCO Joycome Foods on September 24, 2024 and sell it today you would earn a total of 1.00 from holding COFCO Joycome Foods or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nomad Foods vs. COFCO Joycome Foods
Performance |
| Timeline |
| Nomad Foods |
| COFCO Joycome Foods |
Nomad Foods and COFCO Joycome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomad Foods and COFCO Joycome
The main advantage of trading using opposite Nomad Foods and COFCO Joycome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomad Foods position performs unexpectedly, COFCO Joycome 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 COFCO Joycome will offset losses from the drop in COFCO Joycome's long position.| Nomad Foods vs. Apple Inc | Nomad Foods vs. Apple Inc | Nomad Foods vs. Apple Inc | Nomad Foods vs. Apple Inc |
| COFCO Joycome vs. Mowi ASA | COFCO Joycome vs. LEROY SEAFOOD GRUNSPADR | COFCO Joycome vs. Lery Seafood Group | COFCO Joycome vs. Nisshin Seifun Group |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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