Correlation Between SALTX TECHNOLOGY and Nomad Foods
Can any of the company-specific risk be diversified away by investing in both SALTX TECHNOLOGY 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 SALTX TECHNOLOGY and Nomad Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SALTX TECHNOLOGY HLDG and Nomad Foods, you can compare the effects of market volatilities on SALTX TECHNOLOGY 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 SALTX TECHNOLOGY with a short position of Nomad Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of SALTX TECHNOLOGY and Nomad Foods.
Diversification Opportunities for SALTX TECHNOLOGY and Nomad Foods
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SALTX and Nomad is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding SALTX TECHNOLOGY HLDG and Nomad Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nomad Foods and SALTX TECHNOLOGY 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 SALTX TECHNOLOGY HLDG 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 SALTX TECHNOLOGY i.e., SALTX TECHNOLOGY and Nomad Foods go up and down completely randomly.
Pair Corralation between SALTX TECHNOLOGY and Nomad Foods
Assuming the 90 days horizon SALTX TECHNOLOGY HLDG is expected to generate 1.93 times more return on investment than Nomad Foods. However, SALTX TECHNOLOGY is 1.93 times more volatile than Nomad Foods. It trades about 0.06 of its potential returns per unit of risk. Nomad Foods is currently generating about -0.04 per unit of risk. If you would invest 28.00 in SALTX TECHNOLOGY HLDG on October 28, 2024 and sell it today you would earn a total of 1.00 from holding SALTX TECHNOLOGY HLDG or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SALTX TECHNOLOGY HLDG vs. Nomad Foods
Performance |
| Timeline |
| SALTX TECHNOLOGY HLDG |
| Nomad Foods |
SALTX TECHNOLOGY and Nomad Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SALTX TECHNOLOGY and Nomad Foods
The main advantage of trading using opposite SALTX TECHNOLOGY and Nomad Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SALTX TECHNOLOGY 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.| SALTX TECHNOLOGY vs. National Beverage Corp | SALTX TECHNOLOGY vs. Monster Beverage Corp | SALTX TECHNOLOGY vs. Micron Technology | SALTX TECHNOLOGY vs. SOLSTAD OFFSHORE NK |
| Nomad Foods vs. Playa Hotels Resorts | Nomad Foods vs. TRAVEL LEISURE DL 01 | Nomad Foods vs. LG Display Co | Nomad Foods vs. UNIVERSAL DISPLAY |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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