Correlation Between NISSIN FOODS and USWE SPORTS
Can any of the company-specific risk be diversified away by investing in both NISSIN FOODS and USWE SPORTS 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 NISSIN FOODS and USWE SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NISSIN FOODS HLDGS and USWE SPORTS AB, you can compare the effects of market volatilities on NISSIN FOODS and USWE SPORTS 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 NISSIN FOODS with a short position of USWE SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NISSIN FOODS and USWE SPORTS.
Diversification Opportunities for NISSIN FOODS and USWE SPORTS
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NISSIN and USWE is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding NISSIN FOODS HLDGS and USWE SPORTS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USWE SPORTS AB and NISSIN FOODS 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 NISSIN FOODS HLDGS are associated (or correlated) with USWE SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USWE SPORTS AB has no effect on the direction of NISSIN FOODS i.e., NISSIN FOODS and USWE SPORTS go up and down completely randomly.
Pair Corralation between NISSIN FOODS and USWE SPORTS
Assuming the 90 days trading horizon NISSIN FOODS HLDGS is expected to under-perform the USWE SPORTS. But the stock apears to be less risky and, when comparing its historical volatility, NISSIN FOODS HLDGS is 1.71 times less risky than USWE SPORTS. The stock trades about -0.07 of its potential returns per unit of risk. The USWE SPORTS AB is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 60.00 in USWE SPORTS AB on August 24, 2024 and sell it today you would earn a total of 15.00 from holding USWE SPORTS AB or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NISSIN FOODS HLDGS vs. USWE SPORTS AB
Performance |
| Timeline |
| NISSIN FOODS HLDGS |
| USWE SPORTS AB |
NISSIN FOODS and USWE SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NISSIN FOODS and USWE SPORTS
The main advantage of trading using opposite NISSIN FOODS and USWE SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NISSIN FOODS position performs unexpectedly, USWE SPORTS 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 USWE SPORTS will offset losses from the drop in USWE SPORTS's long position.| NISSIN FOODS vs. Apple Inc | NISSIN FOODS vs. Apple Inc | NISSIN FOODS vs. Apple Inc | NISSIN FOODS vs. Apple Inc |
| USWE SPORTS vs. Origin Agritech | USWE SPORTS vs. SIVERS SEMICONDUCTORS AB | USWE SPORTS vs. Talanx AG | USWE SPORTS vs. NorAm Drilling AS |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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