Correlation Between Nomad Foods and GRUPO CARSO-A1
Can any of the company-specific risk be diversified away by investing in both Nomad Foods and GRUPO CARSO-A1 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 GRUPO CARSO-A1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomad Foods and GRUPO CARSO A1, you can compare the effects of market volatilities on Nomad Foods and GRUPO CARSO-A1 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 GRUPO CARSO-A1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomad Foods and GRUPO CARSO-A1.
Diversification Opportunities for Nomad Foods and GRUPO CARSO-A1
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nomad and GRUPO is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Nomad Foods and GRUPO CARSO A1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRUPO CARSO A1 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 GRUPO CARSO-A1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRUPO CARSO A1 has no effect on the direction of Nomad Foods i.e., Nomad Foods and GRUPO CARSO-A1 go up and down completely randomly.
Pair Corralation between Nomad Foods and GRUPO CARSO-A1
Assuming the 90 days trading horizon Nomad Foods is expected to generate 24.61 times less return on investment than GRUPO CARSO-A1. But when comparing it to its historical volatility, Nomad Foods is 2.32 times less risky than GRUPO CARSO-A1. It trades about 0.0 of its potential returns per unit of risk. GRUPO CARSO A1 is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 530.00 in GRUPO CARSO A1 on October 16, 2024 and sell it today you would earn a total of 5.00 from holding GRUPO CARSO A1 or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nomad Foods vs. GRUPO CARSO A1
Performance |
| Timeline |
| Nomad Foods |
| GRUPO CARSO A1 |
Nomad Foods and GRUPO CARSO-A1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomad Foods and GRUPO CARSO-A1
The main advantage of trading using opposite Nomad Foods and GRUPO CARSO-A1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomad Foods position performs unexpectedly, GRUPO CARSO-A1 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 GRUPO CARSO-A1 will offset losses from the drop in GRUPO CARSO-A1's long position.| Nomad Foods vs. Shenandoah Telecommunications | Nomad Foods vs. CENTURIA OFFICE REIT | Nomad Foods vs. KENEDIX OFFICE INV | Nomad Foods vs. ecotel communication ag |
| GRUPO CARSO-A1 vs. TELECOM ITALRISP ADR10 | GRUPO CARSO-A1 vs. GMO Internet | GRUPO CARSO-A1 vs. China Communications Services | GRUPO CARSO-A1 vs. Nomad Foods |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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