Correlation Between Nomad Foods and FlatexDEGIRO
Can any of the company-specific risk be diversified away by investing in both Nomad Foods and FlatexDEGIRO 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 FlatexDEGIRO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomad Foods and flatexDEGIRO AG, you can compare the effects of market volatilities on Nomad Foods and FlatexDEGIRO 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 FlatexDEGIRO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomad Foods and FlatexDEGIRO.
Diversification Opportunities for Nomad Foods and FlatexDEGIRO
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nomad and FlatexDEGIRO is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Nomad Foods and flatexDEGIRO AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on flatexDEGIRO AG 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 FlatexDEGIRO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of flatexDEGIRO AG has no effect on the direction of Nomad Foods i.e., Nomad Foods and FlatexDEGIRO go up and down completely randomly.
Pair Corralation between Nomad Foods and FlatexDEGIRO
Assuming the 90 days trading horizon Nomad Foods is expected to under-perform the FlatexDEGIRO. But the stock apears to be less risky and, when comparing its historical volatility, Nomad Foods is 1.26 times less risky than FlatexDEGIRO. The stock trades about -0.41 of its potential returns per unit of risk. The flatexDEGIRO AG is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 1,553 in flatexDEGIRO AG on October 13, 2024 and sell it today you would lose (29.00) from holding flatexDEGIRO AG or give up 1.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nomad Foods vs. flatexDEGIRO AG
Performance |
| Timeline |
| Nomad Foods |
| flatexDEGIRO AG |
Nomad Foods and FlatexDEGIRO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomad Foods and FlatexDEGIRO
The main advantage of trading using opposite Nomad Foods and FlatexDEGIRO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomad Foods position performs unexpectedly, FlatexDEGIRO 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 FlatexDEGIRO will offset losses from the drop in FlatexDEGIRO's long position.| Nomad Foods vs. COSMOSTEEL HLDGS | Nomad Foods vs. DENTSPLY SIRONA | Nomad Foods vs. Luckin Coffee | Nomad Foods vs. AGRICULTBK HADR25 YC |
| FlatexDEGIRO vs. SYSTEMAIR AB | FlatexDEGIRO vs. RYANAIR HLDGS ADR | FlatexDEGIRO vs. Alaska Air Group | FlatexDEGIRO vs. Air New Zealand |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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