Correlation Between Knowles and NISSIN FOODS
Can any of the company-specific risk be diversified away by investing in both Knowles and NISSIN FOODS 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 Knowles and NISSIN FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knowles and NISSIN FOODS HLDGS, you can compare the effects of market volatilities on Knowles and NISSIN FOODS 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 Knowles with a short position of NISSIN FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knowles and NISSIN FOODS.
Diversification Opportunities for Knowles and NISSIN FOODS
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Knowles and NISSIN is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Knowles and NISSIN FOODS HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISSIN FOODS HLDGS and Knowles 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 Knowles are associated (or correlated) with NISSIN FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISSIN FOODS HLDGS has no effect on the direction of Knowles i.e., Knowles and NISSIN FOODS go up and down completely randomly.
Pair Corralation between Knowles and NISSIN FOODS
Assuming the 90 days horizon Knowles is expected to generate 1.23 times more return on investment than NISSIN FOODS. However, Knowles is 1.23 times more volatile than NISSIN FOODS HLDGS. It trades about 0.03 of its potential returns per unit of risk. NISSIN FOODS HLDGS is currently generating about 0.01 per unit of risk. If you would invest 1,570 in Knowles on September 4, 2024 and sell it today you would earn a total of 290.00 from holding Knowles or generate 18.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Knowles vs. NISSIN FOODS HLDGS
Performance |
| Timeline |
| Knowles |
| NISSIN FOODS HLDGS |
Knowles and NISSIN FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knowles and NISSIN FOODS
The main advantage of trading using opposite Knowles and NISSIN FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knowles position performs unexpectedly, NISSIN FOODS 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 NISSIN FOODS will offset losses from the drop in NISSIN FOODS's long position.| Knowles vs. Tyson Foods | Knowles vs. RYU Apparel | Knowles vs. COFCO Joycome Foods | Knowles vs. ULTRA CLEAN HLDGS |
| NISSIN FOODS vs. TOTAL GABON | NISSIN FOODS vs. Walgreens Boots Alliance | NISSIN FOODS vs. Peak Resources Limited |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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