Correlation Between Nomad Foods and COVIVIO HOTELS
Can any of the company-specific risk be diversified away by investing in both Nomad Foods and COVIVIO HOTELS 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 COVIVIO HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomad Foods and COVIVIO HOTELS INH, you can compare the effects of market volatilities on Nomad Foods and COVIVIO HOTELS 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 COVIVIO HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomad Foods and COVIVIO HOTELS.
Diversification Opportunities for Nomad Foods and COVIVIO HOTELS
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nomad and COVIVIO is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Nomad Foods and COVIVIO HOTELS INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COVIVIO HOTELS INH 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 COVIVIO HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COVIVIO HOTELS INH has no effect on the direction of Nomad Foods i.e., Nomad Foods and COVIVIO HOTELS go up and down completely randomly.
Pair Corralation between Nomad Foods and COVIVIO HOTELS
Assuming the 90 days trading horizon Nomad Foods is expected to generate 3.33 times less return on investment than COVIVIO HOTELS. In addition to that, Nomad Foods is 1.22 times more volatile than COVIVIO HOTELS INH. It trades about 0.01 of its total potential returns per unit of risk. COVIVIO HOTELS INH is currently generating about 0.05 per unit of volatility. If you would invest 1,391 in COVIVIO HOTELS INH on October 31, 2024 and sell it today you would earn a total of 494.00 from holding COVIVIO HOTELS INH or generate 35.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nomad Foods vs. COVIVIO HOTELS INH
Performance |
| Timeline |
| Nomad Foods |
| COVIVIO HOTELS INH |
Nomad Foods and COVIVIO HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomad Foods and COVIVIO HOTELS
The main advantage of trading using opposite Nomad Foods and COVIVIO HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomad Foods position performs unexpectedly, COVIVIO HOTELS 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 COVIVIO HOTELS will offset losses from the drop in COVIVIO HOTELS's long position.| Nomad Foods vs. SEI INVESTMENTS | Nomad Foods vs. Charter Communications | Nomad Foods vs. Keck Seng Investments | Nomad Foods vs. Japan Asia Investment |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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