Correlation Between NH Foods and Qingdao Haier
Can any of the company-specific risk be diversified away by investing in both NH Foods and Qingdao Haier 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 NH Foods and Qingdao Haier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH Foods and Qingdao Haier Co, you can compare the effects of market volatilities on NH Foods and Qingdao Haier 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 NH Foods with a short position of Qingdao Haier. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Foods and Qingdao Haier.
Diversification Opportunities for NH Foods and Qingdao Haier
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between NI6 and Qingdao is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding NH Foods and Qingdao Haier Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao Haier and NH 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 NH Foods are associated (or correlated) with Qingdao Haier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao Haier has no effect on the direction of NH Foods i.e., NH Foods and Qingdao Haier go up and down completely randomly.
Pair Corralation between NH Foods and Qingdao Haier
Assuming the 90 days horizon NH Foods is expected to generate 1.66 times more return on investment than Qingdao Haier. However, NH Foods is 1.66 times more volatile than Qingdao Haier Co. It trades about 0.06 of its potential returns per unit of risk. Qingdao Haier Co is currently generating about 0.06 per unit of risk. If you would invest 3,020 in NH Foods on November 7, 2024 and sell it today you would earn a total of 100.00 from holding NH Foods or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH Foods vs. Qingdao Haier Co
Performance |
| Timeline |
| NH Foods |
| Qingdao Haier |
NH Foods and Qingdao Haier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Foods and Qingdao Haier
The main advantage of trading using opposite NH Foods and Qingdao Haier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Foods position performs unexpectedly, Qingdao Haier 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 Qingdao Haier will offset losses from the drop in Qingdao Haier's long position.| NH Foods vs. Nestl SA | NH Foods vs. Kraft Heinz Co | NH Foods vs. General Mills | NH Foods vs. General Mills |
| Qingdao Haier vs. China Railway Construction | Qingdao Haier vs. Titan Machinery | Qingdao Haier vs. Tokyu Construction Co | Qingdao Haier vs. Dairy Farm International |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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