Correlation Between Ecotel Communication and Nomad Foods
Can any of the company-specific risk be diversified away by investing in both Ecotel Communication 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 Ecotel Communication and Nomad Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ecotel communication ag and Nomad Foods, you can compare the effects of market volatilities on Ecotel Communication 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 Ecotel Communication with a short position of Nomad Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecotel Communication and Nomad Foods.
Diversification Opportunities for Ecotel Communication and Nomad Foods
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ecotel and Nomad is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding ecotel communication ag and Nomad Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nomad Foods and Ecotel Communication 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 ecotel communication ag 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 Ecotel Communication i.e., Ecotel Communication and Nomad Foods go up and down completely randomly.
Pair Corralation between Ecotel Communication and Nomad Foods
Assuming the 90 days trading horizon ecotel communication ag is expected to generate 0.73 times more return on investment than Nomad Foods. However, ecotel communication ag is 1.38 times less risky than Nomad Foods. It trades about 0.24 of its potential returns per unit of risk. Nomad Foods is currently generating about 0.04 per unit of risk. If you would invest 1,340 in ecotel communication ag on October 30, 2024 and sell it today you would earn a total of 90.00 from holding ecotel communication ag or generate 6.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ecotel communication ag vs. Nomad Foods
Performance |
| Timeline |
| ecotel communication |
| Nomad Foods |
Ecotel Communication and Nomad Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecotel Communication and Nomad Foods
The main advantage of trading using opposite Ecotel Communication and Nomad Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecotel Communication 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.| Ecotel Communication vs. Iridium Communications | Ecotel Communication vs. Magnachip Semiconductor | Ecotel Communication vs. TOREX SEMICONDUCTOR LTD | Ecotel Communication vs. Cairo Communication SpA |
| Nomad Foods vs. Altair Engineering | Nomad Foods vs. SALESFORCE INC CDR | Nomad Foods vs. ALTAIR RES INC | Nomad Foods vs. Norwegian Air Shuttle |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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