Correlation Between Nomad Foods and THRACE PLASTICS
Can any of the company-specific risk be diversified away by investing in both Nomad Foods and THRACE PLASTICS 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 THRACE PLASTICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomad Foods and THRACE PLASTICS, you can compare the effects of market volatilities on Nomad Foods and THRACE PLASTICS 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 THRACE PLASTICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomad Foods and THRACE PLASTICS.
Diversification Opportunities for Nomad Foods and THRACE PLASTICS
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nomad and THRACE is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Nomad Foods and THRACE PLASTICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THRACE PLASTICS 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 THRACE PLASTICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THRACE PLASTICS has no effect on the direction of Nomad Foods i.e., Nomad Foods and THRACE PLASTICS go up and down completely randomly.
Pair Corralation between Nomad Foods and THRACE PLASTICS
Assuming the 90 days trading horizon Nomad Foods is expected to under-perform the THRACE PLASTICS. In addition to that, Nomad Foods is 1.99 times more volatile than THRACE PLASTICS. It trades about -0.12 of its total potential returns per unit of risk. THRACE PLASTICS is currently generating about 0.33 per unit of volatility. If you would invest 383.00 in THRACE PLASTICS on October 11, 2024 and sell it today you would earn a total of 16.00 from holding THRACE PLASTICS or generate 4.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nomad Foods vs. THRACE PLASTICS
Performance |
| Timeline |
| Nomad Foods |
| THRACE PLASTICS |
Nomad Foods and THRACE PLASTICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomad Foods and THRACE PLASTICS
The main advantage of trading using opposite Nomad Foods and THRACE PLASTICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomad Foods position performs unexpectedly, THRACE PLASTICS 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 THRACE PLASTICS will offset losses from the drop in THRACE PLASTICS's long position.| Nomad Foods vs. Calibre Mining Corp | Nomad Foods vs. GALENA MINING LTD | Nomad Foods vs. ECHO INVESTMENT ZY | Nomad Foods vs. Guangdong Investment Limited |
| THRACE PLASTICS vs. UNITED RENTALS | THRACE PLASTICS vs. Cincinnati Financial Corp | THRACE PLASTICS vs. GRENKELEASING Dusseldorf | THRACE PLASTICS vs. Fukuyama Transporting Co |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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