Correlation Between Nestl SA and Hormel Foods
Can any of the company-specific risk be diversified away by investing in both Nestl SA and Hormel 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 Nestl SA and Hormel Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nestl SA and Hormel Foods, you can compare the effects of market volatilities on Nestl SA and Hormel 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 Nestl SA with a short position of Hormel Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nestl SA and Hormel Foods.
Diversification Opportunities for Nestl SA and Hormel Foods
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nestl and Hormel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nestl SA and Hormel Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hormel Foods and Nestl SA 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 Nestl SA are associated (or correlated) with Hormel Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hormel Foods has no effect on the direction of Nestl SA i.e., Nestl SA and Hormel Foods go up and down completely randomly.
Pair Corralation between Nestl SA and Hormel Foods
If you would invest 2,818 in Hormel Foods on November 2, 2024 and sell it today you would earn a total of 122.00 from holding Hormel Foods or generate 4.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.69% |
| Values | Daily Returns |
Nestl SA vs. Hormel Foods
Performance |
| Timeline |
| Nestl SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hormel Foods |
Nestl SA and Hormel Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nestl SA and Hormel Foods
The main advantage of trading using opposite Nestl SA and Hormel Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nestl SA position performs unexpectedly, Hormel 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 Hormel Foods will offset losses from the drop in Hormel Foods' long position.| Nestl SA vs. FORWARD AIR P | Nestl SA vs. Fair Isaac Corp | Nestl SA vs. NORWEGIAN AIR SHUT | Nestl SA vs. LAir Liquide SA |
| Hormel Foods vs. Southwest Airlines Co | Hormel Foods vs. MCEWEN MINING INC | Hormel Foods vs. Aegean Airlines SA | Hormel Foods vs. United Airlines Holdings |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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