Correlation Between Nestl SA and Cicor Technologies
Can any of the company-specific risk be diversified away by investing in both Nestl SA and Cicor Technologies 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 Cicor Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nestl SA and Cicor Technologies, you can compare the effects of market volatilities on Nestl SA and Cicor Technologies 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 Cicor Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nestl SA and Cicor Technologies.
Diversification Opportunities for Nestl SA and Cicor Technologies
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nestl and Cicor is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Nestl SA and Cicor Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cicor Technologies 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 Cicor Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cicor Technologies has no effect on the direction of Nestl SA i.e., Nestl SA and Cicor Technologies go up and down completely randomly.
Pair Corralation between Nestl SA and Cicor Technologies
Assuming the 90 days trading horizon Nestl SA is expected to under-perform the Cicor Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Nestl SA is 2.02 times less risky than Cicor Technologies. The stock trades about -0.3 of its potential returns per unit of risk. The Cicor Technologies is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 5,240 in Cicor Technologies on September 1, 2024 and sell it today you would earn a total of 660.00 from holding Cicor Technologies or generate 12.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nestl SA vs. Cicor Technologies
Performance |
| Timeline |
| Nestl SA |
| Cicor Technologies |
Nestl SA and Cicor Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nestl SA and Cicor Technologies
The main advantage of trading using opposite Nestl SA and Cicor Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nestl SA position performs unexpectedly, Cicor Technologies 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 Cicor Technologies will offset losses from the drop in Cicor Technologies' long position.| Nestl SA vs. Novartis AG | Nestl SA vs. Roche Holding AG | Nestl SA vs. Zurich Insurance Group | Nestl SA vs. Swiss Re AG |
| Cicor Technologies vs. Jungfraubahn Holding AG | Cicor Technologies vs. Amsterdam Commodities NV | Cicor Technologies vs. Flow Traders BV | Cicor Technologies vs. ForFarmers NV |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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