Correlation Between NH Foods and New Oriental
Can any of the company-specific risk be diversified away by investing in both NH Foods and New Oriental 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 New Oriental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH Foods Ltd and New Oriental Energy, you can compare the effects of market volatilities on NH Foods and New Oriental 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 New Oriental. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Foods and New Oriental.
Diversification Opportunities for NH Foods and New Oriental
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NIPMY and New is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NH Foods Ltd and New Oriental Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Oriental Energy 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 Ltd are associated (or correlated) with New Oriental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Oriental Energy has no effect on the direction of NH Foods i.e., NH Foods and New Oriental go up and down completely randomly.
Pair Corralation between NH Foods and New Oriental
If you would invest (100.00) in New Oriental Energy on November 28, 2024 and sell it today you would earn a total of 100.00 from holding New Oriental Energy or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
NH Foods Ltd vs. New Oriental Energy
Performance |
| Timeline |
| NH Foods |
| New Oriental Energy |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
NH Foods and New Oriental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Foods and New Oriental
The main advantage of trading using opposite NH Foods and New Oriental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Foods position performs unexpectedly, New Oriental 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 New Oriental will offset losses from the drop in New Oriental's long position.The idea behind NH Foods Ltd and New Oriental Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| New Oriental vs. RH | New Oriental vs. SNDL Inc | New Oriental vs. BBB Foods | New Oriental vs. Albertsons Companies |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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