Correlation Between Nomad Foods and MAG SILVER
Can any of the company-specific risk be diversified away by investing in both Nomad Foods and MAG SILVER 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 MAG SILVER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomad Foods and MAG SILVER, you can compare the effects of market volatilities on Nomad Foods and MAG SILVER 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 MAG SILVER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomad Foods and MAG SILVER.
Diversification Opportunities for Nomad Foods and MAG SILVER
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nomad and MAG is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Nomad Foods and MAG SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAG SILVER 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 MAG SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAG SILVER has no effect on the direction of Nomad Foods i.e., Nomad Foods and MAG SILVER go up and down completely randomly.
Pair Corralation between Nomad Foods and MAG SILVER
Assuming the 90 days trading horizon Nomad Foods is expected to generate 1.35 times less return on investment than MAG SILVER. But when comparing it to its historical volatility, Nomad Foods is 1.48 times less risky than MAG SILVER. It trades about 0.01 of its potential returns per unit of risk. MAG SILVER is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,410 in MAG SILVER on October 11, 2024 and sell it today you would lose (41.00) from holding MAG SILVER or give up 2.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nomad Foods vs. MAG SILVER
Performance |
| Timeline |
| Nomad Foods |
| MAG SILVER |
Nomad Foods and MAG SILVER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomad Foods and MAG SILVER
The main advantage of trading using opposite Nomad Foods and MAG SILVER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomad Foods position performs unexpectedly, MAG SILVER 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 MAG SILVER will offset losses from the drop in MAG SILVER's long position.| Nomad Foods vs. Apple Inc | Nomad Foods vs. Apple Inc | Nomad Foods vs. Apple Inc | Nomad Foods vs. Apple Inc |
| MAG SILVER vs. ARDAGH METAL PACDL 0001 | MAG SILVER vs. United Natural Foods | MAG SILVER vs. Nomad Foods | MAG SILVER vs. TYSON FOODS A |
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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