Correlation Between Martinrea International and NFI
Can any of the company-specific risk be diversified away by investing in both Martinrea International and NFI 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 Martinrea International and NFI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Martinrea International and NFI Group, you can compare the effects of market volatilities on Martinrea International and NFI 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 Martinrea International with a short position of NFI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martinrea International and NFI.
Diversification Opportunities for Martinrea International and NFI
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Martinrea and NFI is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Martinrea International and NFI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NFI Group and Martinrea 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 Martinrea International are associated (or correlated) with NFI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NFI Group has no effect on the direction of Martinrea International i.e., Martinrea International and NFI go up and down completely randomly.
Pair Corralation between Martinrea International and NFI
Assuming the 90 days trading horizon Martinrea International is expected to under-perform the NFI. But the stock apears to be less risky and, when comparing its historical volatility, Martinrea International is 1.35 times less risky than NFI. The stock trades about -0.04 of its potential returns per unit of risk. The NFI Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 913.00 in NFI Group on November 19, 2024 and sell it today you would earn a total of 251.00 from holding NFI Group or generate 27.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Martinrea International vs. NFI Group
Performance |
| Timeline |
| Martinrea International |
| NFI Group |
Martinrea International and NFI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martinrea International and NFI
The main advantage of trading using opposite Martinrea International and NFI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martinrea International position performs unexpectedly, NFI 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 NFI will offset losses from the drop in NFI's long position.| Martinrea International vs. Linamar | Martinrea International vs. Aecon Group | Martinrea International vs. NFI Group | Martinrea International vs. Element Fleet Management |
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.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |