Correlation Between MidCap Financial and Nomad Foods
Can any of the company-specific risk be diversified away by investing in both MidCap Financial and Nomad 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 MidCap Financial and Nomad Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MidCap Financial Investment and Nomad Foods, you can compare the effects of market volatilities on MidCap Financial and Nomad 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 MidCap Financial with a short position of Nomad Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of MidCap Financial and Nomad Foods.
Diversification Opportunities for MidCap Financial and Nomad Foods
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MidCap and Nomad is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding MidCap Financial Investment and Nomad Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nomad Foods and MidCap Financial 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 MidCap Financial Investment are associated (or correlated) with Nomad Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nomad Foods has no effect on the direction of MidCap Financial i.e., MidCap Financial and Nomad Foods go up and down completely randomly.
Pair Corralation between MidCap Financial and Nomad Foods
Assuming the 90 days trading horizon MidCap Financial is expected to generate 1.58 times less return on investment than Nomad Foods. In addition to that, MidCap Financial is 1.0 times more volatile than Nomad Foods. It trades about 0.0 of its total potential returns per unit of risk. Nomad Foods is currently generating about 0.0 per unit of volatility. If you would invest 1,600 in Nomad Foods on October 18, 2024 and sell it today you would lose (20.00) from holding Nomad Foods or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MidCap Financial Investment vs. Nomad Foods
Performance |
| Timeline |
| MidCap Financial Inv |
| Nomad Foods |
MidCap Financial and Nomad Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MidCap Financial and Nomad Foods
The main advantage of trading using opposite MidCap Financial and Nomad Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MidCap Financial position performs unexpectedly, Nomad 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 Nomad Foods will offset losses from the drop in Nomad Foods' long position.| MidCap Financial vs. TELECOM ITALIA | MidCap Financial vs. Chunghwa Telecom Co | MidCap Financial vs. CITIC Telecom International | MidCap Financial vs. MEDICAL FACILITIES NEW |
| Nomad Foods vs. Dalata Hotel Group | Nomad Foods vs. PennantPark Investment | Nomad Foods vs. HK Electric Investments | Nomad Foods vs. MidCap Financial Investment |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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