Correlation Between Nomad Foods and FAST RETAIL
Can any of the company-specific risk be diversified away by investing in both Nomad Foods and FAST RETAIL 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 FAST RETAIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomad Foods and FAST RETAIL ADR, you can compare the effects of market volatilities on Nomad Foods and FAST RETAIL 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 FAST RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomad Foods and FAST RETAIL.
Diversification Opportunities for Nomad Foods and FAST RETAIL
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nomad and FAST is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Nomad Foods and FAST RETAIL ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAST RETAIL ADR 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 FAST RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAST RETAIL ADR has no effect on the direction of Nomad Foods i.e., Nomad Foods and FAST RETAIL go up and down completely randomly.
Pair Corralation between Nomad Foods and FAST RETAIL
Assuming the 90 days trading horizon Nomad Foods is expected to generate 4.66 times less return on investment than FAST RETAIL. But when comparing it to its historical volatility, Nomad Foods is 1.23 times less risky than FAST RETAIL. It trades about 0.04 of its potential returns per unit of risk. FAST RETAIL ADR is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,189 in FAST RETAIL ADR on November 3, 2024 and sell it today you would earn a total of 871.00 from holding FAST RETAIL ADR or generate 39.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nomad Foods vs. FAST RETAIL ADR
Performance |
| Timeline |
| Nomad Foods |
| FAST RETAIL ADR |
Nomad Foods and FAST RETAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomad Foods and FAST RETAIL
The main advantage of trading using opposite Nomad Foods and FAST RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomad Foods position performs unexpectedly, FAST RETAIL 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 FAST RETAIL will offset losses from the drop in FAST RETAIL's long position.| Nomad Foods vs. CVW CLEANTECH INC | Nomad Foods vs. Tokyu Construction Co | Nomad Foods vs. ALERION CLEANPOWER | Nomad Foods vs. CanSino Biologics |
| FAST RETAIL vs. Warner Music Group | FAST RETAIL vs. United Rentals | FAST RETAIL vs. Global Ship Lease | FAST RETAIL vs. DIVERSIFIED ROYALTY |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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