Correlation Between Nomad Foods and MUTUIONLINE
Can any of the company-specific risk be diversified away by investing in both Nomad Foods and MUTUIONLINE 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 MUTUIONLINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomad Foods and MUTUIONLINE, you can compare the effects of market volatilities on Nomad Foods and MUTUIONLINE 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 MUTUIONLINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomad Foods and MUTUIONLINE.
Diversification Opportunities for Nomad Foods and MUTUIONLINE
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nomad and MUTUIONLINE is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nomad Foods and MUTUIONLINE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MUTUIONLINE 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 MUTUIONLINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MUTUIONLINE has no effect on the direction of Nomad Foods i.e., Nomad Foods and MUTUIONLINE go up and down completely randomly.
Pair Corralation between Nomad Foods and MUTUIONLINE
Assuming the 90 days trading horizon Nomad Foods is expected to generate 1.1 times more return on investment than MUTUIONLINE. However, Nomad Foods is 1.1 times more volatile than MUTUIONLINE. It trades about -0.06 of its potential returns per unit of risk. MUTUIONLINE is currently generating about -0.1 per unit of risk. If you would invest 1,650 in Nomad Foods on October 25, 2024 and sell it today you would lose (80.00) from holding Nomad Foods or give up 4.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nomad Foods vs. MUTUIONLINE
Performance |
| Timeline |
| Nomad Foods |
| MUTUIONLINE |
Nomad Foods and MUTUIONLINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomad Foods and MUTUIONLINE
The main advantage of trading using opposite Nomad Foods and MUTUIONLINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomad Foods position performs unexpectedly, MUTUIONLINE 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 MUTUIONLINE will offset losses from the drop in MUTUIONLINE's long position.| Nomad Foods vs. ONWARD MEDICAL BV | Nomad Foods vs. Addus HomeCare | Nomad Foods vs. CAIRN HOMES EO | Nomad Foods vs. PEPTONIC MEDICAL |
| MUTUIONLINE vs. Nomad Foods | MUTUIONLINE vs. United Natural Foods | MUTUIONLINE vs. Magnachip Semiconductor | MUTUIONLINE vs. Cal Maine Foods |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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