Correlation Between Caravelle International and Nates Food
Can any of the company-specific risk be diversified away by investing in both Caravelle International and Nates Food 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 Caravelle International and Nates Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caravelle International Group and Nates Food Co, you can compare the effects of market volatilities on Caravelle International and Nates Food 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 Caravelle International with a short position of Nates Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caravelle International and Nates Food.
Diversification Opportunities for Caravelle International and Nates Food
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Caravelle and Nates is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Caravelle International Group and Nates Food Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nates Food and Caravelle International 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 Caravelle International Group are associated (or correlated) with Nates Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nates Food has no effect on the direction of Caravelle International i.e., Caravelle International and Nates Food go up and down completely randomly.
Pair Corralation between Caravelle International and Nates Food
Given the investment horizon of 90 days Caravelle International is expected to generate 39.44 times less return on investment than Nates Food. But when comparing it to its historical volatility, Caravelle International Group is 22.78 times less risky than Nates Food. It trades about 0.13 of its potential returns per unit of risk. Nates Food Co is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 0.05 in Nates Food Co on October 25, 2024 and sell it today you would lose (0.04) from holding Nates Food Co or give up 80.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caravelle International Group vs. Nates Food Co
Performance |
| Timeline |
| Caravelle International |
| Nates Food |
Caravelle International and Nates Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caravelle International and Nates Food
The main advantage of trading using opposite Caravelle International and Nates Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caravelle International position performs unexpectedly, Nates Food 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 Nates Food will offset losses from the drop in Nates Food's long position.| Caravelle International vs. Finnair Oyj | Caravelle International vs. Delta Air Lines | Caravelle International vs. Wizz Air Holdings | Caravelle International vs. Hurco Companies |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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