Correlation Between COVIVIO HOTELS and Nomad Foods
Can any of the company-specific risk be diversified away by investing in both COVIVIO HOTELS 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 COVIVIO HOTELS and Nomad Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COVIVIO HOTELS INH and Nomad Foods, you can compare the effects of market volatilities on COVIVIO HOTELS 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 COVIVIO HOTELS with a short position of Nomad Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of COVIVIO HOTELS and Nomad Foods.
Diversification Opportunities for COVIVIO HOTELS and Nomad Foods
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COVIVIO and Nomad is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding COVIVIO HOTELS INH and Nomad Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nomad Foods and COVIVIO HOTELS 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 COVIVIO HOTELS INH 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 COVIVIO HOTELS i.e., COVIVIO HOTELS and Nomad Foods go up and down completely randomly.
Pair Corralation between COVIVIO HOTELS and Nomad Foods
Assuming the 90 days horizon COVIVIO HOTELS INH is expected to generate 1.14 times more return on investment than Nomad Foods. However, COVIVIO HOTELS is 1.14 times more volatile than Nomad Foods. It trades about 0.07 of its potential returns per unit of risk. Nomad Foods is currently generating about 0.02 per unit of risk. If you would invest 1,477 in COVIVIO HOTELS INH on October 20, 2024 and sell it today you would earn a total of 428.00 from holding COVIVIO HOTELS INH or generate 28.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COVIVIO HOTELS INH vs. Nomad Foods
Performance |
| Timeline |
| COVIVIO HOTELS INH |
| Nomad Foods |
COVIVIO HOTELS and Nomad Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COVIVIO HOTELS and Nomad Foods
The main advantage of trading using opposite COVIVIO HOTELS and Nomad Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COVIVIO HOTELS 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.| COVIVIO HOTELS vs. Nomad Foods | COVIVIO HOTELS vs. MTY Food Group | COVIVIO HOTELS vs. PLANT VEDA FOODS | COVIVIO HOTELS vs. Austevoll Seafood ASA |
| Nomad Foods vs. Sumitomo Rubber Industries | Nomad Foods vs. Compagnie Plastic Omnium | Nomad Foods vs. Tyson Foods | Nomad Foods vs. Materialise NV |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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