Correlation Between NH Foods and AMERICAN
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By analyzing existing cross correlation between NH Foods Ltd and AMERICAN WTR CAP, you can compare the effects of market volatilities on NH Foods and AMERICAN 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 AMERICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Foods and AMERICAN.
Diversification Opportunities for NH Foods and AMERICAN
Pay attention - limited upside
The 3 months correlation between NIPMY and AMERICAN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NH Foods Ltd and AMERICAN WTR CAP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN WTR CAP 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 AMERICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN WTR CAP has no effect on the direction of NH Foods i.e., NH Foods and AMERICAN go up and down completely randomly.
Pair Corralation between NH Foods and AMERICAN
Assuming the 90 days horizon NH Foods is expected to generate 3.33 times less return on investment than AMERICAN. But when comparing it to its historical volatility, NH Foods Ltd is 3.45 times less risky than AMERICAN. It trades about 0.09 of its potential returns per unit of risk. AMERICAN WTR CAP is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 8,331 in AMERICAN WTR CAP on September 2, 2024 and sell it today you would earn a total of 700.00 from holding AMERICAN WTR CAP or generate 8.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 57.14% |
| Values | Daily Returns |
NH Foods Ltd vs. AMERICAN WTR CAP
Performance |
| Timeline |
| NH Foods |
| AMERICAN WTR CAP |
NH Foods and AMERICAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Foods and AMERICAN
The main advantage of trading using opposite NH Foods and AMERICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Foods position performs unexpectedly, AMERICAN 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 AMERICAN will offset losses from the drop in AMERICAN's long position.The idea behind NH Foods Ltd and AMERICAN WTR CAP 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.| AMERICAN vs. Oatly Group AB | AMERICAN vs. Constellation Brands Class | AMERICAN vs. Cardinal Health | AMERICAN vs. Willamette Valley Vineyards |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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