Correlation Between Nomad Foods and MEBUKI FINANCIAL
Can any of the company-specific risk be diversified away by investing in both Nomad Foods and MEBUKI FINANCIAL 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 MEBUKI FINANCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomad Foods and MEBUKI FINANCIAL GROUP, you can compare the effects of market volatilities on Nomad Foods and MEBUKI FINANCIAL 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 MEBUKI FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomad Foods and MEBUKI FINANCIAL.
Diversification Opportunities for Nomad Foods and MEBUKI FINANCIAL
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nomad and MEBUKI is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Nomad Foods and MEBUKI FINANCIAL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEBUKI FINANCIAL 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 MEBUKI FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEBUKI FINANCIAL has no effect on the direction of Nomad Foods i.e., Nomad Foods and MEBUKI FINANCIAL go up and down completely randomly.
Pair Corralation between Nomad Foods and MEBUKI FINANCIAL
Assuming the 90 days trading horizon Nomad Foods is expected to generate 2.77 times less return on investment than MEBUKI FINANCIAL. In addition to that, Nomad Foods is 1.01 times more volatile than MEBUKI FINANCIAL GROUP. It trades about 0.19 of its total potential returns per unit of risk. MEBUKI FINANCIAL GROUP is currently generating about 0.53 per unit of volatility. If you would invest 342.00 in MEBUKI FINANCIAL GROUP on September 4, 2024 and sell it today you would earn a total of 76.00 from holding MEBUKI FINANCIAL GROUP or generate 22.22% 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. MEBUKI FINANCIAL GROUP
Performance |
| Timeline |
| Nomad Foods |
| MEBUKI FINANCIAL |
Nomad Foods and MEBUKI FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomad Foods and MEBUKI FINANCIAL
The main advantage of trading using opposite Nomad Foods and MEBUKI FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomad Foods position performs unexpectedly, MEBUKI FINANCIAL 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 MEBUKI FINANCIAL will offset losses from the drop in MEBUKI FINANCIAL's long position.| Nomad Foods vs. Apple Inc | Nomad Foods vs. Apple Inc | Nomad Foods vs. Apple Inc | Nomad Foods vs. Apple Inc |
| MEBUKI FINANCIAL vs. Lifeway Foods | MEBUKI FINANCIAL vs. Premier Foods PLC | MEBUKI FINANCIAL vs. PT Indofood Sukses | MEBUKI FINANCIAL vs. The Hanover Insurance |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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