Correlation Between Nomad Foods and ASURE SOFTWARE
Can any of the company-specific risk be diversified away by investing in both Nomad Foods and ASURE SOFTWARE 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 ASURE SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomad Foods and ASURE SOFTWARE, you can compare the effects of market volatilities on Nomad Foods and ASURE SOFTWARE 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 ASURE SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomad Foods and ASURE SOFTWARE.
Diversification Opportunities for Nomad Foods and ASURE SOFTWARE
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nomad and ASURE is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Nomad Foods and ASURE SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASURE SOFTWARE 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 ASURE SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASURE SOFTWARE has no effect on the direction of Nomad Foods i.e., Nomad Foods and ASURE SOFTWARE go up and down completely randomly.
Pair Corralation between Nomad Foods and ASURE SOFTWARE
Assuming the 90 days trading horizon Nomad Foods is expected to generate 36.65 times less return on investment than ASURE SOFTWARE. But when comparing it to its historical volatility, Nomad Foods is 2.37 times less risky than ASURE SOFTWARE. It trades about 0.03 of its potential returns per unit of risk. ASURE SOFTWARE is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 870.00 in ASURE SOFTWARE on October 20, 2024 and sell it today you would earn a total of 290.00 from holding ASURE SOFTWARE or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nomad Foods vs. ASURE SOFTWARE
Performance |
| Timeline |
| Nomad Foods |
| ASURE SOFTWARE |
Nomad Foods and ASURE SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomad Foods and ASURE SOFTWARE
The main advantage of trading using opposite Nomad Foods and ASURE SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomad Foods position performs unexpectedly, ASURE SOFTWARE 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 ASURE SOFTWARE will offset losses from the drop in ASURE SOFTWARE's long position.| Nomad Foods vs. INDOFOOD AGRI RES | Nomad Foods vs. SENECA FOODS A | Nomad Foods vs. GWILLI FOOD | Nomad Foods vs. Pembina Pipeline Corp |
| ASURE SOFTWARE vs. GOLD ROAD RES | ASURE SOFTWARE vs. BRIT AMER TOBACCO | ASURE SOFTWARE vs. BII Railway Transportation | ASURE SOFTWARE vs. BROADWIND ENRGY |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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