Correlation Between Nissin Foods and Sibanye Stillwater
Can any of the company-specific risk be diversified away by investing in both Nissin Foods and Sibanye Stillwater 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 Sibanye Stillwater into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nissin Foods Holdings and Sibanye Stillwater Limited, you can compare the effects of market volatilities on Nissin Foods and Sibanye Stillwater 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 Sibanye Stillwater. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nissin Foods and Sibanye Stillwater.
Diversification Opportunities for Nissin Foods and Sibanye Stillwater
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nissin and Sibanye is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Nissin Foods Holdings and Sibanye Stillwater Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sibanye Stillwater 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 Holdings are associated (or correlated) with Sibanye Stillwater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sibanye Stillwater has no effect on the direction of Nissin Foods i.e., Nissin Foods and Sibanye Stillwater go up and down completely randomly.
Pair Corralation between Nissin Foods and Sibanye Stillwater
Assuming the 90 days horizon Nissin Foods Holdings is expected to generate 3.32 times more return on investment than Sibanye Stillwater. However, Nissin Foods is 3.32 times more volatile than Sibanye Stillwater Limited. It trades about 0.02 of its potential returns per unit of risk. Sibanye Stillwater Limited is currently generating about -0.01 per unit of risk. If you would invest 9,225 in Nissin Foods Holdings on September 2, 2024 and sell it today you would lose (6,805) from holding Nissin Foods Holdings or give up 73.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 59.41% |
| Values | Daily Returns |
Nissin Foods Holdings vs. Sibanye Stillwater Limited
Performance |
| Timeline |
| Nissin Foods Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sibanye Stillwater |
Nissin Foods and Sibanye Stillwater Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nissin Foods and Sibanye Stillwater
The main advantage of trading using opposite Nissin Foods and Sibanye Stillwater positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nissin Foods position performs unexpectedly, Sibanye Stillwater 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 Sibanye Stillwater will offset losses from the drop in Sibanye Stillwater's long position.| Nissin Foods vs. Campbell Soup | Nissin Foods vs. McCormick Company Incorporated | Nissin Foods vs. Hormel Foods | Nissin Foods vs. General Mills |
| Sibanye Stillwater vs. Vior Inc | Sibanye Stillwater vs. Peloton Minerals | Sibanye Stillwater vs. BTU Metals Corp | Sibanye Stillwater vs. Palamina Corp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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