Correlation Between CME and NISSIN FOODS
Can any of the company-specific risk be diversified away by investing in both CME and NISSIN 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 CME and NISSIN FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CME Group and NISSIN FOODS HLDGS, you can compare the effects of market volatilities on CME and NISSIN 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 CME with a short position of NISSIN FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CME and NISSIN FOODS.
Diversification Opportunities for CME and NISSIN FOODS
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CME and NISSIN is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding CME Group and NISSIN FOODS HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISSIN FOODS HLDGS and CME 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 CME Group are associated (or correlated) with NISSIN FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISSIN FOODS HLDGS has no effect on the direction of CME i.e., CME and NISSIN FOODS go up and down completely randomly.
Pair Corralation between CME and NISSIN FOODS
Assuming the 90 days trading horizon CME Group is expected to generate 0.74 times more return on investment than NISSIN FOODS. However, CME Group is 1.35 times less risky than NISSIN FOODS. It trades about 0.07 of its potential returns per unit of risk. NISSIN FOODS HLDGS is currently generating about 0.01 per unit of risk. If you would invest 15,064 in CME Group on October 7, 2024 and sell it today you would earn a total of 7,506 from holding CME Group or generate 49.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CME Group vs. NISSIN FOODS HLDGS
Performance |
| Timeline |
| CME Group |
| NISSIN FOODS HLDGS |
CME and NISSIN FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CME and NISSIN FOODS
The main advantage of trading using opposite CME and NISSIN FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CME position performs unexpectedly, NISSIN 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 NISSIN FOODS will offset losses from the drop in NISSIN FOODS's long position.| CME vs. ARROW ELECTRONICS | CME vs. Calibre Mining Corp | CME vs. MAGNUM MINING EXP | CME vs. INDUSTRIAL MINERALS LTD |
| NISSIN FOODS vs. Apple Inc | NISSIN FOODS vs. Apple Inc | NISSIN FOODS vs. Apple Inc | NISSIN FOODS vs. Apple Inc |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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