Correlation Between Nomad Foods and LOANDEPOT INC
Can any of the company-specific risk be diversified away by investing in both Nomad Foods and LOANDEPOT INC 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 LOANDEPOT INC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomad Foods and LOANDEPOT INC A, you can compare the effects of market volatilities on Nomad Foods and LOANDEPOT INC 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 LOANDEPOT INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomad Foods and LOANDEPOT INC.
Diversification Opportunities for Nomad Foods and LOANDEPOT INC
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nomad and LOANDEPOT is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Nomad Foods and LOANDEPOT INC A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOANDEPOT INC A 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 LOANDEPOT INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOANDEPOT INC A has no effect on the direction of Nomad Foods i.e., Nomad Foods and LOANDEPOT INC go up and down completely randomly.
Pair Corralation between Nomad Foods and LOANDEPOT INC
Assuming the 90 days trading horizon Nomad Foods is expected to generate 0.31 times more return on investment than LOANDEPOT INC. However, Nomad Foods is 3.25 times less risky than LOANDEPOT INC. It trades about -0.28 of its potential returns per unit of risk. LOANDEPOT INC A is currently generating about -0.27 per unit of risk. If you would invest 1,650 in Nomad Foods on October 17, 2024 and sell it today you would lose (110.00) from holding Nomad Foods or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nomad Foods vs. LOANDEPOT INC A
Performance |
| Timeline |
| Nomad Foods |
| LOANDEPOT INC A |
Nomad Foods and LOANDEPOT INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomad Foods and LOANDEPOT INC
The main advantage of trading using opposite Nomad Foods and LOANDEPOT INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomad Foods position performs unexpectedly, LOANDEPOT INC 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 LOANDEPOT INC will offset losses from the drop in LOANDEPOT INC's long position.| Nomad Foods vs. PARKEN Sport Entertainment | Nomad Foods vs. CLOVER HEALTH INV | Nomad Foods vs. ZINC MEDIA GR | Nomad Foods vs. HEALTHSTREAM |
| LOANDEPOT INC vs. Sanyo Chemical Industries | LOANDEPOT INC vs. Nomad Foods | LOANDEPOT INC vs. Tyson Foods | LOANDEPOT INC vs. KINGBOARD CHEMICAL |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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