Correlation Between Nomad Foods and INSURANCE AUST
Can any of the company-specific risk be diversified away by investing in both Nomad Foods and INSURANCE AUST 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 INSURANCE AUST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomad Foods and INSURANCE AUST GRP, you can compare the effects of market volatilities on Nomad Foods and INSURANCE AUST 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 INSURANCE AUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomad Foods and INSURANCE AUST.
Diversification Opportunities for Nomad Foods and INSURANCE AUST
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nomad and INSURANCE is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Nomad Foods and INSURANCE AUST GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INSURANCE AUST GRP 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 INSURANCE AUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INSURANCE AUST GRP has no effect on the direction of Nomad Foods i.e., Nomad Foods and INSURANCE AUST go up and down completely randomly.
Pair Corralation between Nomad Foods and INSURANCE AUST
Assuming the 90 days trading horizon Nomad Foods is expected to under-perform the INSURANCE AUST. But the stock apears to be less risky and, when comparing its historical volatility, Nomad Foods is 1.25 times less risky than INSURANCE AUST. The stock trades about -0.41 of its potential returns per unit of risk. The INSURANCE AUST GRP is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 505.00 in INSURANCE AUST GRP on October 13, 2024 and sell it today you would earn a total of 0.00 from holding INSURANCE AUST GRP or generate 0.0% 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. INSURANCE AUST GRP
Performance |
| Timeline |
| Nomad Foods |
| INSURANCE AUST GRP |
Nomad Foods and INSURANCE AUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomad Foods and INSURANCE AUST
The main advantage of trading using opposite Nomad Foods and INSURANCE AUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomad Foods position performs unexpectedly, INSURANCE AUST 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 INSURANCE AUST will offset losses from the drop in INSURANCE AUST's long position.| Nomad Foods vs. COSMOSTEEL HLDGS | Nomad Foods vs. DENTSPLY SIRONA | Nomad Foods vs. Luckin Coffee | Nomad Foods vs. AGRICULTBK HADR25 YC |
| INSURANCE AUST vs. Globex Mining Enterprises | INSURANCE AUST vs. PLANT VEDA FOODS | INSURANCE AUST vs. Tyson Foods | INSURANCE AUST vs. Nomad 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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