Correlation Between Nomad Foods and ICICI Bank
Can any of the company-specific risk be diversified away by investing in both Nomad Foods and ICICI Bank 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 ICICI Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomad Foods and ICICI Bank Limited, you can compare the effects of market volatilities on Nomad Foods and ICICI Bank 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 ICICI Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomad Foods and ICICI Bank.
Diversification Opportunities for Nomad Foods and ICICI Bank
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nomad and ICICI is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Nomad Foods and ICICI Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICICI Bank Limited 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 ICICI Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICICI Bank Limited has no effect on the direction of Nomad Foods i.e., Nomad Foods and ICICI Bank go up and down completely randomly.
Pair Corralation between Nomad Foods and ICICI Bank
Assuming the 90 days trading horizon Nomad Foods is expected to generate 1.33 times more return on investment than ICICI Bank. However, Nomad Foods is 1.33 times more volatile than ICICI Bank Limited. It trades about 0.18 of its potential returns per unit of risk. ICICI Bank Limited is currently generating about -0.01 per unit of risk. If you would invest 1,530 in Nomad Foods on November 9, 2024 and sell it today you would earn a total of 130.00 from holding Nomad Foods or generate 8.5% 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. ICICI Bank Limited
Performance |
| Timeline |
| Nomad Foods |
| ICICI Bank Limited |
Nomad Foods and ICICI Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomad Foods and ICICI Bank
The main advantage of trading using opposite Nomad Foods and ICICI Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomad Foods position performs unexpectedly, ICICI Bank 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 ICICI Bank will offset losses from the drop in ICICI Bank's long position.| Nomad Foods vs. UNITED UTILITIES GR | Nomad Foods vs. CLEAN ENERGY FUELS | Nomad Foods vs. CVW CLEANTECH INC | Nomad Foods vs. Cleanaway Waste Management |
| ICICI Bank vs. Q2M Managementberatung AG | ICICI Bank vs. Jupiter Fund Management | ICICI Bank vs. Stag Industrial | ICICI Bank vs. Zijin Mining Group |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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