Correlation Between NH Foods and Software Acquisition
Can any of the company-specific risk be diversified away by investing in both NH Foods and Software Acquisition 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 Software Acquisition 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 Software Acquisition Group, you can compare the effects of market volatilities on NH Foods and Software Acquisition 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 Software Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Foods and Software Acquisition.
Diversification Opportunities for NH Foods and Software Acquisition
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NIPMY and Software is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NH Foods Ltd and Software Acquisition Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Software Acquisition 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 Software Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Software Acquisition has no effect on the direction of NH Foods i.e., NH Foods and Software Acquisition go up and down completely randomly.
Pair Corralation between NH Foods and Software Acquisition
If you would invest 108.00 in Software Acquisition Group on September 2, 2024 and sell it today you would earn a total of 6.00 from holding Software Acquisition Group or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH Foods Ltd vs. Software Acquisition Group
Performance |
| Timeline |
| NH Foods |
| Software Acquisition |
NH Foods and Software Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Foods and Software Acquisition
The main advantage of trading using opposite NH Foods and Software Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Foods position performs unexpectedly, Software Acquisition 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 Software Acquisition will offset losses from the drop in Software Acquisition's long position.The idea behind NH Foods Ltd and Software Acquisition Group 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.| Software Acquisition vs. Kite Realty Group | Software Acquisition vs. Lululemon Athletica | Software Acquisition vs. Titan Machinery | Software Acquisition vs. Coupang LLC |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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