Correlation Between Givaudan and Nano One
Can any of the company-specific risk be diversified away by investing in both Givaudan and Nano One 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 Givaudan and Nano One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Givaudan SA and Nano One Materials, you can compare the effects of market volatilities on Givaudan and Nano One 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 Givaudan with a short position of Nano One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Givaudan and Nano One.
Diversification Opportunities for Givaudan and Nano One
Significant diversification
The 3 months correlation between Givaudan and Nano is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Givaudan SA and Nano One Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano One Materials and Givaudan 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 Givaudan SA are associated (or correlated) with Nano One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano One Materials has no effect on the direction of Givaudan i.e., Givaudan and Nano One go up and down completely randomly.
Pair Corralation between Givaudan and Nano One
Assuming the 90 days horizon Givaudan SA is expected to generate 0.55 times more return on investment than Nano One. However, Givaudan SA is 1.81 times less risky than Nano One. It trades about -0.21 of its potential returns per unit of risk. Nano One Materials is currently generating about -0.38 per unit of risk. If you would invest 521,100 in Givaudan SA on August 24, 2024 and sell it today you would lose (42,300) from holding Givaudan SA or give up 8.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Givaudan SA vs. Nano One Materials
Performance |
| Timeline |
| Givaudan SA |
| Nano One Materials |
Givaudan and Nano One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Givaudan and Nano One
The main advantage of trading using opposite Givaudan and Nano One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Givaudan position performs unexpectedly, Nano One 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 Nano One will offset losses from the drop in Nano One's long position.| Givaudan vs. Sika AG ADR | Givaudan vs. Givaudan SA ADR | Givaudan vs. Symrise Ag PK | Givaudan vs. Novozymes AS |
| Nano One vs. First Graphene | Nano One vs. HUMANA INC | Nano One vs. Aquagold International | Nano One vs. Barloworld Ltd ADR |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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