Correlation Between Nomad Foods and Canadian Natural
Can any of the company-specific risk be diversified away by investing in both Nomad Foods and Canadian Natural 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 Canadian Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomad Foods and Canadian Natural Resources, you can compare the effects of market volatilities on Nomad Foods and Canadian Natural 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 Canadian Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomad Foods and Canadian Natural.
Diversification Opportunities for Nomad Foods and Canadian Natural
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nomad and Canadian is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Nomad Foods and Canadian Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Natural Res 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 Canadian Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Natural Res has no effect on the direction of Nomad Foods i.e., Nomad Foods and Canadian Natural go up and down completely randomly.
Pair Corralation between Nomad Foods and Canadian Natural
Assuming the 90 days trading horizon Nomad Foods is expected to generate 1.06 times more return on investment than Canadian Natural. However, Nomad Foods is 1.06 times more volatile than Canadian Natural Resources. It trades about 0.16 of its potential returns per unit of risk. Canadian Natural Resources is currently generating about -0.03 per unit of risk. If you would invest 1,580 in Nomad Foods on November 3, 2024 and sell it today you would earn a total of 120.00 from holding Nomad Foods or generate 7.59% 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. Canadian Natural Resources
Performance |
| Timeline |
| Nomad Foods |
| Canadian Natural Res |
Nomad Foods and Canadian Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomad Foods and Canadian Natural
The main advantage of trading using opposite Nomad Foods and Canadian Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomad Foods position performs unexpectedly, Canadian Natural 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 Canadian Natural will offset losses from the drop in Canadian Natural's long position.| Nomad Foods vs. AGRICULTBK HADR25 YC | Nomad Foods vs. SIERRA METALS | Nomad Foods vs. Dairy Farm International | Nomad Foods vs. DAIDO METAL TD |
| Canadian Natural vs. Sixt Leasing SE | Canadian Natural vs. PT Steel Pipe | Canadian Natural vs. UNITED RENTALS | Canadian Natural vs. FUYO GENERAL LEASE |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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