Correlation Between NISSIN FOODS and NEXA RESOURCES
Can any of the company-specific risk be diversified away by investing in both NISSIN FOODS and NEXA RESOURCES 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 NEXA RESOURCES 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 NEXA RESOURCES SA, you can compare the effects of market volatilities on NISSIN FOODS and NEXA RESOURCES 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 NEXA RESOURCES. Check out your portfolio center. Please also check ongoing floating volatility patterns of NISSIN FOODS and NEXA RESOURCES.
Diversification Opportunities for NISSIN FOODS and NEXA RESOURCES
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between NISSIN and NEXA is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding NISSIN FOODS HLDGS and NEXA RESOURCES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXA RESOURCES SA 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 NEXA RESOURCES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXA RESOURCES SA has no effect on the direction of NISSIN FOODS i.e., NISSIN FOODS and NEXA RESOURCES go up and down completely randomly.
Pair Corralation between NISSIN FOODS and NEXA RESOURCES
Assuming the 90 days trading horizon NISSIN FOODS HLDGS is expected to under-perform the NEXA RESOURCES. But the stock apears to be less risky and, when comparing its historical volatility, NISSIN FOODS HLDGS is 1.26 times less risky than NEXA RESOURCES. The stock trades about -0.05 of its potential returns per unit of risk. The NEXA RESOURCES SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 540.00 in NEXA RESOURCES SA on September 4, 2024 and sell it today you would earn a total of 165.00 from holding NEXA RESOURCES SA or generate 30.56% 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. NEXA RESOURCES SA
Performance |
| Timeline |
| NISSIN FOODS HLDGS |
| NEXA RESOURCES SA |
NISSIN FOODS and NEXA RESOURCES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NISSIN FOODS and NEXA RESOURCES
The main advantage of trading using opposite NISSIN FOODS and NEXA RESOURCES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NISSIN FOODS position performs unexpectedly, NEXA RESOURCES 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 NEXA RESOURCES will offset losses from the drop in NEXA RESOURCES's long position.| NISSIN FOODS vs. TOTAL GABON | NISSIN FOODS vs. Walgreens Boots Alliance | NISSIN FOODS vs. Peak Resources Limited |
| NEXA RESOURCES vs. NISSIN FOODS HLDGS | NEXA RESOURCES vs. GUARDANT HEALTH CL | NEXA RESOURCES vs. CVS Health | NEXA RESOURCES vs. SENECA FOODS A |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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