Correlation Between NISSIN FOODS and Lennox International
Can any of the company-specific risk be diversified away by investing in both NISSIN FOODS and Lennox International 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 Lennox International 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 Lennox International, you can compare the effects of market volatilities on NISSIN FOODS and Lennox International 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 Lennox International. Check out your portfolio center. Please also check ongoing floating volatility patterns of NISSIN FOODS and Lennox International.
Diversification Opportunities for NISSIN FOODS and Lennox International
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between NISSIN and Lennox is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding NISSIN FOODS HLDGS and Lennox International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lennox International 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 Lennox International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lennox International has no effect on the direction of NISSIN FOODS i.e., NISSIN FOODS and Lennox International go up and down completely randomly.
Pair Corralation between NISSIN FOODS and Lennox International
Assuming the 90 days trading horizon NISSIN FOODS HLDGS is expected to under-perform the Lennox International. But the stock apears to be less risky and, when comparing its historical volatility, NISSIN FOODS HLDGS is 1.19 times less risky than Lennox International. The stock trades about -0.03 of its potential returns per unit of risk. The Lennox International is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 36,645 in Lennox International on September 14, 2024 and sell it today you would earn a total of 25,195 from holding Lennox International or generate 68.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NISSIN FOODS HLDGS vs. Lennox International
Performance |
| Timeline |
| NISSIN FOODS HLDGS |
| Lennox International |
NISSIN FOODS and Lennox International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NISSIN FOODS and Lennox International
The main advantage of trading using opposite NISSIN FOODS and Lennox International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NISSIN FOODS position performs unexpectedly, Lennox International 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 Lennox International will offset losses from the drop in Lennox International's long position.| NISSIN FOODS vs. Apple Inc | NISSIN FOODS vs. Apple Inc | NISSIN FOODS vs. Apple Inc | NISSIN FOODS vs. Apple Inc |
| Lennox International vs. FUTURE GAMING GRP | Lennox International vs. Harmony Gold Mining | Lennox International vs. Hochschild Mining plc | Lennox International vs. PLAYMATES TOYS |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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